• Kyodo

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The International Monetary Fund on Wednesday lifted sharply its growth projection for the Japanese economy to 2.4 percent for 2010, up from 1.9 percent in its April forecast, while revising upward its growth outlook for the world economy by 0.4 percentage point to 4.6 percent this year.

As for 2011, however, the IMF’s revised World Economic Outlook report trimmed its growth estimate for the Japanese economy to 1.8 percent, compared with 2.0 percent in its April projection.

The updated report left its global growth estimate for 2011 unchanged at 4.3 percent.

The IMF said stronger-than-expected exports in the first half of 2010 are largely attributable to the upward revision of Japan’s economic outlook.

But the Washington-based lender expects the Japanese economy to slow down in 2011 as fiscal stimulus is expected to taper off gradually.

Despite the upbeat outlook for the world economy this year, the IMF warned, “Downside risks have risen sharply amid renewed financial turbulence.”

It also urged policymakers to take steps to ensure a recovery can take root, saying, “The new forecasts hinge on implementation of policies to rebuild confidence and stability, particularly in the euro area.”

The IMF also called on developed countries to make efforts to implement credible fiscal consolidation through such measures as tax reforms.

The lender also noted the importance of accommodative monetary conditions and structural reforms in helping boost growth and competitiveness of developed countries.

The IMF now anticipates the U.S. economy to expand 3.3 percent in 2010, up from 3.1 percent in its April estimate, and to grow 2.9 percent the following year, up from 2.6 percent.

Mirroring the sovereign debt crisis, the IMF remains cautious about the prospects of the eurozone economy, maintaining its growth estimate of 1.0 percent for 2010.

The institution expects the eurozone economy to rise 1.3 percent in 2011, down 0.2 point from its previous estimate.

Turning to emerging economies, the IMF raised its growth projection for China by 0.5 point to 10.5 percent for 2010, while cutting the outlook to 9.6 percent for 2011, down 0.3 point from its April estimate.

Emerging economies are projected overall to swell 6.8 percent this year, against the previous forecast of 6.3 percent, and expected to grow 6.4 percent in 2011, down 0.1 point.

The IMF noted that emerging economies should help re-balance global demand.

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