Last Updated : 12 April 2011 at 20:30 IST
WASHINGTON (Commodity Online) : The IMF in its World Economic Outlook report said global financial conditions continue to improve after the global crisis, although they remain unusually fragile.
The IMF report emphasizes the need to keep interest rates low in advanced economies like the UK in order to strengthen their recovery.
International Monetary Fund added that oil prices and inflation in emerging economies pose new risks to global recovery but are not yet strong enough to derail it.
Soaring costs for basic staples stoked the social and economic tensions that have roiled the Arab world. Street protests have toppled dictatorships in Egypt and Tunisia, and left leaders in Yemen and Libya fighting to cling to power.
The Fund said inflation pressures were likely to build in developing countries as people pushed for higher wages in the face of pricier food and fuel.
The fastest growth was still in emerging economies, the IMF said. China was expected to lead the way with 9.6% growth this year, followed by India, at an 8.2% rate.
By contrast, the United States was forecast to grow a sub-par 2.8% this year and 2.9% in 2012.
In Europe, the IMF said recovery was gaining traction despite financial turbulence in Greece, Ireland and Portugal. The IMF revised up its euro zone outlook to 1.6% this year and 1.8% in 2012.
The fastest growth in recent years has come from emerging markets like China, Brazil and India, which helped offset the deep downturns in the United States and other rich nations touched off by burst housing bubbles.
The IMF's central scenario remains one of slow-paced recovery. It kept its forecasts for global growth for both 2011 and 2012 at 4.4% and 4.5%, respectively.
However, it said emerging markets have become a particular worry spot. The Fund warned they faced the risk of inflation as they struggle to deal with hard-to-control capital inflows.
The IMF highlighted the searing impact of rising food and commodity prices on poorer countries and warned that inflation will remain elevated for a while.
Last week, the IMF said global oil markets are in a period of increased scarcity, as oil demand in emerging economies is rapidly catching up with demand in advanced economies and production constraints are beginning to bind in some major oil-exporting economies, where oil fields have reached maturity.
Improvements in oil supply have been slow, reflecting investment bottlenecks and other constraints, and the IMF expects net capacity will build only gradually.
The chapter on oil scarcity assesses the risk for the global economy in the medium term of the supply constraints. A persistent adverse oil supply shock would imply lower global output, higher revenues for oil exporters, a surge in global capital flows, and a widening of current account imbalances.
Oil remains the most important source of primary energy in the world, accounting for about 33 percent of the total. The two other fossil fuels, coal and natural gas, account for 28 and 23 percent. The analysis says that renewable sources of energy are in a rapid growth phase, but they still account for only a small fraction of primary energy supplies.
The IMF report emphasizes the need to keep interest rates low in advanced economies like the UK in order to strengthen their recovery.
International Monetary Fund added that oil prices and inflation in emerging economies pose new risks to global recovery but are not yet strong enough to derail it.
Soaring costs for basic staples stoked the social and economic tensions that have roiled the Arab world. Street protests have toppled dictatorships in Egypt and Tunisia, and left leaders in Yemen and Libya fighting to cling to power.
The Fund said inflation pressures were likely to build in developing countries as people pushed for higher wages in the face of pricier food and fuel.
The fastest growth was still in emerging economies, the IMF said. China was expected to lead the way with 9.6% growth this year, followed by India, at an 8.2% rate.
By contrast, the United States was forecast to grow a sub-par 2.8% this year and 2.9% in 2012.
In Europe, the IMF said recovery was gaining traction despite financial turbulence in Greece, Ireland and Portugal. The IMF revised up its euro zone outlook to 1.6% this year and 1.8% in 2012.
The fastest growth in recent years has come from emerging markets like China, Brazil and India, which helped offset the deep downturns in the United States and other rich nations touched off by burst housing bubbles.
The IMF's central scenario remains one of slow-paced recovery. It kept its forecasts for global growth for both 2011 and 2012 at 4.4% and 4.5%, respectively.
However, it said emerging markets have become a particular worry spot. The Fund warned they faced the risk of inflation as they struggle to deal with hard-to-control capital inflows.
The IMF highlighted the searing impact of rising food and commodity prices on poorer countries and warned that inflation will remain elevated for a while.
Last week, the IMF said global oil markets are in a period of increased scarcity, as oil demand in emerging economies is rapidly catching up with demand in advanced economies and production constraints are beginning to bind in some major oil-exporting economies, where oil fields have reached maturity.
Improvements in oil supply have been slow, reflecting investment bottlenecks and other constraints, and the IMF expects net capacity will build only gradually.
The chapter on oil scarcity assesses the risk for the global economy in the medium term of the supply constraints. A persistent adverse oil supply shock would imply lower global output, higher revenues for oil exporters, a surge in global capital flows, and a widening of current account imbalances.
Oil remains the most important source of primary energy in the world, accounting for about 33 percent of the total. The two other fossil fuels, coal and natural gas, account for 28 and 23 percent. The analysis says that renewable sources of energy are in a rapid growth phase, but they still account for only a small fraction of primary energy supplies.
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