Risks to world recovery have 'risen sharply'

By Grace Wong, contributing writer


LONDON (CNNMoney.com) -- The global economy grew at a stronger-than-expected pace in the first six months of the year, but the risks to recovery have greatly increased, according to the International Monetary Fund.

In an update of its World Economic Outlook, released Wednesday, the IMF raised its growth forecast for 2010 to 4.6% from the 4.2% estimate it made in April.

However, the international organization warned that the risks to recovery have "risen sharply" due to renewed financial turbulence.

It left its 2011 forecast for world growth unchanged at 4.3%.

The IMF said world economic growth exceeded forecasts in the first half of the year, largely driven by expansion in Asia.

But looking ahead, it offered a more dour view.

It cautioned that "recent turbulence in financial markets - reflecting a drop in confidence about fiscal sustainability, policy response, and future growth prospects - has cast a cloud over the outlook."

For 2011, the IMF sees cooling growth in China to 9.6% from 10.5% this year.

In the United States, it predicts growth will slow to 2.9% next year from 3.3% in 2010.

It forecasts a slight improvement, though, in Europe. The IMF expects the euro area economy to grow 1.3% next year after expanding a mere 1% this year. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.78%
15 yr fixed3.04%3.00%
5/1 ARM3.14%3.16%
30 yr refi3.88%3.85%
15 yr refi3.13%3.09%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,976.31 263.65 1.49%
Nasdaq 4,947.44 56.22 1.15%
S&P 500 2,086.24 25.22 1.22%
Treasuries 1.96 0.01 0.77%
Data as of 8:07am ET
Company Price Change % Change
Bank of America Corp... 15.52 0.21 1.37%
Intel Corp 31.46 -0.54 -1.69%
Apple Inc 126.37 3.12 2.53%
Altera Corp 42.82 -1.57 -3.54%
Microsoft Corp 40.96 -0.01 -0.02%
Data as of Mar 30
Sponsors

Sections

Gazprom, the world's biggest gas producer, saw its net profit fall 70% in 2014 as weak ruble and the conflict in Ukraine weighted in. More

The dollar's rapid rally is hurting many emerging market nations. Investors are getting out of dodge. More