IMF raises outlook for economies

The IMF’s chief economist, Olivier Blanchard, says there is up to a one-in-five chance that the eurozone could slip into a deflationary spiral as the fund upgraded global economic growth to 3.7% in its latest World Economic Outlook.

The improvement is based on the US economy gaining momentum. The forecast for the world’s largest economy has been raised to 2.8% from a previous forecast of 2.6%. The UK economy is also expected to growth at a much faster pace over the course of this year compared with last October. The forecast has been revised up from 1.9% to 2.4%.

“The euro area is turning the corner from recession to recovery. Growth is projected to strengthen to 1% in 2014 and 1.4% in 2015, but the recovery will be uneven,” the IMF said it in its report.