By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-The International Monetary Fund (IMF) Tuesday predicted that global activity would strengthen in 2014-2015 with much of the impetus for growth coming from advanced economies, but warned of risks from emerging market economies.

In its latest world economic outlook (WEO) April 2014, the IMF said improved policies from both the advanced and emerging market economies were needed to aid and sustain the already improved global growth.

‘’Advanced economy policymakers need to avoid a premature withdrawal of monetary accommodation. Emerging market economy policymakers must adopt measures to changing fundamentals, facilitate external adjustment, further monetary policy tightening, and carry out structural reforms,’’ the WEO report said.

The IMF says global output is projected to strengthen from 3 percent in 2013 to 3.6 percent in 2014 and 3.9 percent in 2015, broadly unchanged from the October 2013 outlook.

Also, in advanced economies, growth is expected to increase to about2¼ percent in 2014–15, an improvement of about1 percentage point compared with 2013.

The WEO report affirmed that growth in the United States will be strongest at about 2¾ percent and output is expected to be positive but varied in the euro area: stronger in the core, but weaker in countries with high debt (both private and public) and financial fragmentation, which will both weigh on domestic demand.

‘’In emerging market and developing economies, growth is projected to pick up gradually from 4.7 percent in 2013 to about 5 percent in 2014 and 5¼ percent in 2015. Growth will be helped by stronger external demand from advanced economies, but tighter financial conditions will dampen domestic demand growth,’’ the IMF said.

While in China, output is expected to remain at about 7½ percent in 2014 as the authorities seek to rein in credit and advance reforms while ensuring a gradual transition to a more balanced and sustainable growth path.

The IMF report says global recovery is still fragile despite improved prospects, and significant downside risks—both old and new—remain.

Also, geopolitical risks have emerged as a result of the problem between Russia and the western world over Ukraine.

The IMF says in its April 2014 ‘’Global Financial Stability Report’’, that unexpectedly, rapid normalization of U.S. monetary policy or renewed bouts of high risk aversion on the part of investors could result in further financial crisis.

This situation is expected to affect some emerging market economies, with a risk of contagion and broad-based financial stress, which would lower output.

‘’In advanced economies, risks to activity associated with very low inflation have come to the fore, especially in the euro area, where large output gaps have contributed to low inflation. With inflation likely to remain below target for some time, longer-term inflation expectations might drift down, leading to even lower inflation than is currently expected, or possibly to deflation if other downside risks to activity materialize,’’ the WEO report said.