Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.36%3.43%
15 yr fixed2.65%2.69%
5/1 ARM2.87%2.93%
30 yr refi3.40%3.46%
15 yr refi2.69%2.73%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,432.24 -24.11 -0.13%
Nasdaq 5,162.13 7.15 0.14%
S&P 500 2,173.60 3.54 0.16%
Treasuries 1.46 -0.05 -3.51%
Data as of 12:22am ET
Company Price Change % Change
KeyCorp 11.70 0.05 0.43%
Bank of America Corp... 14.49 -0.19 -1.29%
Ford Motor Co 12.66 -0.05 -0.39%
General Electric Co 31.14 -0.11 -0.35%
Chesapeake Energy Co... 5.42 0.23 4.43%
Data as of Jul 29
Sponsors

Sections

For the first time ever, Amazon and Facebook are more valuable than Berkshire Hathaway, the storied company run by legendary investor Warren Buffett. More

Venezuela's government issues a decree recently that makes it possible to force workers to work in the country's fields amid food shortages. More

Sheryl Sandberg says she supports Hillary Clinton for president, because she would help close the gender gap, and because she's 'the most qualified candidate.' More

It's about to get harder for some luxury all-cash home buyers to hide their identity from the U.S. government. More