IMF improves its economic forecast for the world economy in 2011

The IMF (International Monetary Fund) has updated its 2011 economic forecast for Eastern Europe from an initial 3.1 percent economic growth announced in October, to 3.6 percent, according to the World Economic Outlook report made public this Tuesday. Worldwide the fund estimates an economic growth of 4.4 percent, 0.2 percent more relative to the last report.

For the Euro Area, IMF has kept its initial estimation of 1.5 percent economic growth while for the 2012 it estimates 1.7 percent (less by 0.1 percent against the October report).

IMF representatives say that overall, the world economy will continue to experience a two-speed recovery. “The most urgent requirements for robust recovery are comprehensive and rapid actions to overcome sovereign and financial troubles in the euro area and policies to redress fiscal imbalances and to repair and reform financial systems in advanced economies more generally,” reads the report.

In Europe, financial stresses are expected to remain elevated in the periphery of the euro area, due to the fact that market participants are still concerned about “sovereign and banking risk, the political feasibility of current and envisioned austerity measures, and the lack of a comprehensive solution”.

Financial turmoil could also spread from the periphery to the core of Europe as a consequence of „continuing weakness among financial institutions in many of the region’s advanced economies, and a lack of transparency about their exposures”.

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Germany’s economy is estimated to grow by 2.2 percent this year (a 0.2 percent increase against the October report) and by 2 percent in 2012, France should see an economic grow th of 1.6 percent in 2011 (unchanged) and 1.8 percent in 2012 while for Great Britain the forecast reaches 2 percent in 2011 (unchanged) and 2.3 percent in 2012.

According to the same source, Russia will see a 4.5 percent (0.2 percent more) growth this year and 4.4 percent in 2012. For China, IMF foresees 9.6 growth this year and 9.5 in 2012.

For 2012, IMF foresees that the economies in Eastern Europe will grow by 4 percent (a 0.2 percent an upward revision relative to the October report) and worldwide the economy will increase by 4.5 percent (unchanged).