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IMF Revises Up 2010 World GDP Forecast to 2.9%

The International Monetary Fund has revised up its forecast for economic growth this year and next in major industrialised economies and worldwide, according to a document obtained by Reuters on Friday.

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The IMF now forecasts the world economy will shrink by 1.3 percent in 2009, a shade less than its earlier forecast of 1.4 percent contraction, before growing by 2.9 percent in 2010, revised up from the 2.5 percent it expected in April.

The figures — which had been due to be published next week — support comments made by IMF Managing Director Dominique Strauss-Kahn in Berlin earlier on Friday, when he said that economic recovery would be sluggish and warned against unwinding recent economic stimulus packages too quickly.

For advanced economies, the IMF predicted 3.7 percent contraction this year — slightly less than the 3.8 percent previously forecast — and then growth of 1.0 percent in 2010, up from an earlier 0.6 percent.

The forecasts are broadly in line with revised forecasts for the second half of 2009 released by the Organisation for Economic Cooperation and Development on Thursday.

The IMF upgraded its 2009 forecasts for the United States, euro zone, Japan and Germany -- the biggest beneficiary, with its estimated contraction reduced to 5.3 percent from 6.2 percent. But it worsened its 2009 outlook for Britain, seeing 4.5 percent contraction instead of 4.2 percent.

For 2010, forecasts for all the above economies were revised up, with the exception of Japan's growth, which was left unchanged at 1.7 percent.

Despite positive economic growth in the second quarter of 2009, the German economy was seen returning to recession, shrinking 0.1 percent year-on-year in 2010, albeit less than the 0.6 percent decline previously pencilled in.