By Agency Reporter

Wednesday, 26 Jan 2011

A package of United States tax cuts should give a lift to a global economic recovery that had already begun to gain speed late last year, the International Monetary Fund said on Tuesday as it revised its world growth forecast higher.

In an updated World Economic Outlook report, the IMF said the global economy would likely expand by 4.4 per cent this year, a touch higher than the 4.2 per cent it forecast in October. It said it expected growth of 4.5 per cent in 2012.

Tax cuts enacted late last year would likely lift growth in the United States by half a per cent this year, and a separate stimulative package from Japan would also help sustain the moderate global recovery, the IMF said.

“More generally, signs are increasing that private consumption, which fell sharply during the crisis, is starting to gain a foothold in major advanced economies,” it said.

Advanced economies have been a drag on global growth since the financial crisis erupted in 2007.

Source: Punch