IMF raises global economic forecast

The International Monetary Fund (IMF) has raised its global economic forecast after the impact of a credit crunch was not as severe as had been first feared.



The IMF said it now expects the global economy to grow 4.1 in 2008, up from an initial forecast of 3.7 percent in April.



That compares with five percent growth in 2007.



Despite upgrading forecasts for the UK and US, the IMF warned that the global economy remained in a tough spot.



According to the IMF, policymakers need to balance growth, while dealing with inflation.



It is said the global economy is in a tough spot, caught between sharply slowing demand in many advanced economies and rising inflation everywhere, notably in emerging and developing countries.



According to the IMF, the top priority for policymakers is to head off rising inflationary pressure, while keeping sight of risks to growth.