2nd October, 2009

According to the International Monetary Fund (IMF) world economy is recovering faster than expected. This feed back from the IMF will bring some relief to the economists and investing public at large. Despite lots of hurdles in complete recovery as yet it seems clear that the world economy might have escaped a depression.

According to the twice-yearly World Economic Outlook, the world is poised to grow by 3.1 per cent in 2010 with much of the recovery driven by emerging economies such as China and India. That is up from the 2.5 per cent in the IMF's previous set of estimates.

And for 2009, the IMF now expects a 1.1 per cent decline of global GDP instead of the 1.4 per cent contraction it predicted in July.

But though things may not be as bad as they could have been, the IMF sought to temper any euphoria, especially as unemployment will continue to rise for many months yet.

The recovery has started in terms of having positive output growth accoring to the IMF's economic counsellor but still caution is the watch word and governments should not be hasty in withdrawing the added spending and low interest rates that have helped restore growth.