The International Monetary Fund (IMF) has upgraded its forecast for global economic growth in 2010 due to a faster than anticipated global recovery.
The IMF predicted global growth in 2010 to be 3.0 per cent in October but has now upgraded that to 3.9 per cent, partly due to vigorous growth in emerging markets such as Asia.
Projections for the Australian economy were also upgraded, with the IMF now predicting Australia would grow by 2.5 per cent in 2010 and 3.0 per cent in 2011. This is considerably stronger than the recovery forecast for other advanced economies, which are expected to grow by 2.1 per cent in 2010 and 2.4 per cent in 2011, according to the IMF.
This growth is in line with the Federal Government’s most forecasts released in the mid-year economic and fiscal outlook late last year, according to Treasurer Wayne Swan. Australia was the only G20 country to record positive growth in 2009 rather than slip into recession.
The IMF has cautioned that the recovery would be sluggish in most advanced economies, with the level of real output expected to remain below its pre-crisis levels until late 2011.
Australia’s “miracle economy” is outpacing other economies into recovery, along with China, according to economic consulting firm Access Economics. But a “rip-snorter” of a recovery should not be expected, with a long grind ahead as governments wind back stimulus and interest rates head back towards more normal levels, Access warned.
