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Cautious optimism justified, says IMF

The International Monetary Fund (IMF) has released its latest World Economic Outlook update - sticking with its prediction that the global economy will grow.

In 2012, the global economy grew by 3.2 per cent and the IMF believes this year will see a further 3.5 per cent of growth, reports abcnews.go.com. However, these figures are dwarfed by the equivalent statistics for China - 7.8 per cent and 8.2 per cent.

Olivier Blanchard, chief economist at the organisation said: "Some cautious optimism may indeed be justified. But we should be under no illusions; there remain considerable challenges ahead."

The main challenges in question were identified as the problems in the eurozone and the outlook for the US - with both of these capable of knocking other emerging or recovering economies off track. In the UK, companies involved with trading to either of these regions will no doubt be keeping abreast of these situations.

According to guardian.co.uk, the message from the IMF to the UK could not be any clearer, as Mr Blanchard suggested the country needs to revisit its fiscal policy.

The IMF head noted that the organisation had previously said it would call for action if economic figures looked bad at the beginning of 2013 - "which they do", said Mr Blanchard.

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