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Global economy is expanding, says IMF

But in its latest world Economic outlook, the IMF said the “pace of recovery is expected to be slow”. It added that the recovery is likely to be “insufficient to decrease unemployment for quite sometime”.
On Wednesday, the IMF cut its forecast for the amount that banks are likely to lose in bad loans and investments.
The total it expects banks to lose between 2007 and 2010 is now $3.4tn (£2.1tn), down from its previous estimate of $4tn.

This reduction is a direct result of the improved outlook for the global economy.
Separately, the head of the European Central Bank (ECB) said that the 16 countries in the eurozone should withdraw stimulus packages in the next two years.

“From an ECB point of view, it is important to do what is necessary to exit as soon as possible,” Jean-Claude Trichet said at a meeting of EU finance ministers and central bank governors in Gothenburg.
“It is important in our view that it starts as soon as the recovery starts. It is something which is essential for the recovery itself.

“I would say, in our own view, at the latest in 2011, the global recovery is being led by Asia, where economies have “withstood the financial turmoil much better than expected,” the IMF said.


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