Washington, Jan 25 (PTI) The International Monetary Fundtoday raised growth forecast for global economy to 4.4 percent while retaining the projection for India at 8.4 per centfor calendar year 2011.
The multilateral lender International Monetary Fund(IMF), however, cautioned that downside risks to globalrecovery remain "elevated".
In October last year, IMF had pegged the world economicexpansion at 4.2 per cent in 2011.
The upward revision in growth estimate has come on theback of "stronger-than-expected activity in the second half of2010 as well as new policy initiatives in the US that willboost activity this year," IMF said in an update to its WorldEconomic Outlook report.
Meanwhile, IMF has retained the October 2010 growthprojection for India and China. While Indian economy isexpected to expand 8.4 per cent this year, neighbouring Chinais projected to grow 9.6 per cent during the same period.
In calendar 2012, India is projected to clock a growth of8 per cent.
The lender also pointed out that world economy is seeinga ''two-speed recovery'' -- implying that developed nations areexpanding at a slower pace than emerging markets.
To ensure robust recovery, IMF said that countries''should take steps to overcome financial troubles in euro areaas well as initiate policies to redress fiscal imbalances.
"These need to be complemented with policies that keepoverheating pressures in check and facilitate externalre-balancing in key emerging economies," IMF said.
According to the multilateral lender, many emergingeconomies are facing inflation pressures and there are evensigns of overheating, partly due to strong capital inflows.
World economy is expected to expand 4.5 per cent in 2012,it noted.