THE INTERNATIONAL Monetary Fund (IMF) is likely to revise its 2010 growth forecast for the world economy up with signs the rate of decline in global output has moderated, a senior IMF official said yesterday.

Addressing a Turkish business conference in this southern Turkish resort, IMF first deputy managing director John Lipsky, however, warned it was far too early to declare victory, with financial conditions far from normal and the world economy still in recession.

“While the latest data point to a slowing of the global contraction, there is still great uncertainty regarding the timing and pace of economic recovery,” he said to the Turkish Industrialist’s and Businessmen’s Association.

However, Mr Lipsky said signs are emerging that the rate of output decline has moderated, financial conditions have improved, confidence is recovering and indicators of future production and demand have firmed.

In this context, “I expect that in the coming weeks we will revise our growth projections modestly upward, mainly with regard to 2010,” he said.

The IMF is scheduled to present updated forecasts for the world economy on July 7th in Washington. In its previous forecast in April, the fund projected the world economy would contract 1.3 per cent this year in the deepest recession since the second World War and then rebound to grow at 1.9 per cent next year.

Mr Lipsky said the recovery next year will be sluggish, with activity in the world’s advanced economies likely to revive only gradually, weighed down by financial deleveraging, restrained credit growth and weak household income growth.

Meanwhile, emerging markets will be unable to return to trend growth while advanced economies are still underperforming.

“As a result, output gaps and unemployment rates in most economies should continue rising through 2010,” Mr Lipsky warned.