E Europe: The IMF and EBRD upgrade growth forecasts
Overview:
Both the IMF and EBRD have released revised economic forecasts this week in which the growth outlook for 2010 and beyond has been upgraded. First, the world economy is growing faster than had been anticipated with Emerging Asia leading the way. The IMF warns that the recovery remains fragile, however, and overly dependent on stimulative monetary and fiscal policies that must be withdrawn gradually as private demand shows signs of recovery. On the back of this more positive external demand story, the EBRD has improved its outlook for the economies of Eastern Europe and the Former Soviet Union. The message here is similar: the pace of recovery is far from uniform with many localised problems related to cleaning up the excesses of the credit boom providing a drag on growth in some areas.