Economic growth
January 26, 2010
In its biannual report on growth, the International Monetary Fund (IMF) says Germany's exporters will drive economic activity. In 2009, German manufacturers felt the full force of the recession, but orders picked up towards the end of the year.
Paired with fiscal stimulus measures, the IMF believes Germany can achieve growth of 1.5 percent this year, more than the mere 0.3 percent growth the IMF predicted last October.
The fund also raised projections for the global economy, expecting it to expand by 3.9 percent, up from the 3.1 percent it forecast last year. The euro zone could grow by 1 percent, but with Spain remaining in recession.
Uneven recovery
Although more optimistic than last year, the IMF sounded a note of caution. IMF chief economist Olivier Blanchard warns that the global recovery remains shaky.
"The world economy is recovering. The recovery remains however largely policy driven and it is increasingly a multi-speed recovery," he says.
While China and India are expected to grow by 10 percent and 7.7 percent respectively this year, advanced economies will continue to struggle.
Blanchard says growth "will barely be enough to reduce the output gap and unemployment will remain high."
The IMF also wants to see deeper reforms in the banking industry, and it has warned industrial nations like the US and those in Europe not to pull the plug on stimulus measures too soon.
ng/dpa/AFP
Editor: Rob Turner