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IMF sees stronger recovery but banks still fragile

January 26, 2010 | “MarketWatch"

WASHINGTON (MarketWatch) -- The global recovery is off to a stronger start than expected but financial stability remains fragile, according to the International Monetary Fund's latest outlook released on Tuesday. In the world's largest economies, the recovery is expected to remain sluggish and there is little evidence of demand not driven by government stimulus. In many emerging economies activity will be relatively vigorous, the IMF said. Due to the fragile nature of the recovery, "fiscal policies need to remain supportive of economic activity in the near term." And there remains the pressing need to continue repairing the financial sector. There is a risk that public debt issuance in coming years could crowd out private sector credit growth.

By Greg Robb

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