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The International Monetary Fund says the
global economy, after enduring a crippling recession, should see
better-than-expected growth this year, led by strength in China and
other developing nations.

      In an updated economic outlook, the IMF forecast that the world
economy would expand 4.2 percent this year, faster than its
previous projection and a sharp improvement from 2009 when global
output fell by 0.6 percent, the worst performance since World War
II.

      However, the international lending agency warned that the
recovery still remained vulnerable with the biggest threat likely
to come from a surge in government debt burdens.

      "The outlook for activity remains unusually uncertain," the
IMF said in its latest World Economic Outlook. "Although a variety
of risks have receded, downside risks related to the growth of
public debt in advanced economies have become sharply more
evident."

      The IMF's estimate that the global economy would grow 4.2
percent this year, represented a 0.3 percentage point increase from
the IMF's January forecast. For 2011, the IMF projected global
growth of 4.3 percent, no change from its January outlook.

      The IMF expects wide disparities between regions with the United
States outperforming Europe and Japan but lagging behind China and
other developing nations.


      For the United States, the IMF expects growth of 3.1 percent
this year, in line with private forecasters, after a 2.4 percent
plunge in the U.S. gross domestic product in 2009, the biggest
decline since 1946.


      The IMF forecast that China's economy would surge 10 percent
this year and that India would grow 8.8 percent. But it looked for
the 16 European countries that share the euro currency would see
economic growth of just 1 percent in 2010.


      The new forecast was prepared for upcoming meetings of global
financial leaders including daylong talks Friday involving the
Group of 20 nations, which include the world's richest industrial
countries and major developing nations including China, Brazil,
India and Russia.

      The U.S. delegation will be led by Treasury Secretary Timothy
Geithner and Federal Reserve Chairman Ben Bernanke. The G-20 talks
and weekend discussions at the IMF and World Bank are expected to
focus on overhauling financial regulatory systems and rebalancing
global growth to make the recovery more sustainable.

      U.S. Treasury officials who briefed reporters Tuesday on
Geithner's agenda said they believed support was growing for a
financial risk levy along the lines of one proposed by President
Barack Obama that seeks to raise $90 billion from the largest U.S.
banks to recoup losses from the $700 billion financial bailout
fund.


      The U.S. officials said they expected another key discussion
topic would be the need to eliminate global imbalances, a goal that
Obama and other G-20 leaders set at a summit in Pittsburgh last
September.

      The rebalancing effort would mean that countries with large
trade and budget deficits would seek to boost savings and lower
domestic demand while countries such as China that are running huge
trade surpluses would transition to more domestic-led growth.

      To foster the change in China, the Obama administration has been
pressuring Beijing to allow its currency, the yuan, to rise in
value against the dollar. American manufacturers contend the yuan
is undervalued by as much as 40 percent, giving Chinese producers
huge trade advantages over U.S. companies.

      However, the Treasury officials did not answer directly when
asked whether the U.S. complaints would be brought up in the G-20
discussions. The administration has been seeking recently to temper
its rhetoric with China on currency issues in hopes a softer tone
will gain better results.

      The IMF outlook, however, warned that a the sharp narrowing of
the U.S. trade deficit in 2009 and the lower Chinese trade surplus
were likely. The IMF said it was essential for China, now the
world's third largest economy, to do its part to assist in
combatting global imbalances.

      The IMF said even with global growth rebounding, unemployment
was likely to remain high in the United States and other developed
countries over the next two years, given the severity of the
downturn in those nations.
      

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Business and Economic News

The International Monetary Fund says the
global economy, after enduring a crippling recession, should see
better-than-expected growth this year, led by strength in China and
other developing nations.


IMF says global economy to grow 4.2% this year

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