Growth Sluggish, But Will Continue, Says I.M.F.

The world economy is augured to mark a robust recovery this year, however, the recovery remains threatened by major risks and the growth is likely to get sluggish, the International Monetary Fund posted Thursday in its latest revelation of global economy.

“In the near term, the main risk is an escalation of financial stress and contagion, prompted by rising concern over sovereign risk”, the I. M. F. said. “This could lead to additional increases in funding costs and weaker bank balance sheets, and hence to tighter lending conditions, declining business and consumer confidence and abrupt changes in exchange rates”.

This year has witnessed strong economic growth than widely expected, especially in Asia and other rising markets, triggering the I. M. F. on Thursday to raise its global growth forecast for 2010 touching 4.6%.

The rise is recorded to be raised from the 4.2% projection it had estimated in April.

Developed countries marked a growth estimated 3% during the first half, the I. M. F. posted, however, the pace was augured to plunge to only 2% during the second half of 2010, as growth in private demand becomes sluggish.

The I. M. F. augured that the world’s advanced economies would widen by 2.4% next year, compared with 2.6% this year.