United Nations Radio

The International Monetary Fund says the global economy is beginning to pull out of a recession unprecedented in the post World War II era. But the stabilization is uneven and the recovery is expected to be sluggish.

construction work in Jakarta

In its world economic outlook update, the IMF says financial conditions have improved more than expected mainly due to public intervention.

Recent data suggest that the rate of decline in economic activity is moderating, although there are differences among regions.

Jose Vinhas, Director of the IMF's monetary and capital markets department cautions that these financial markets still depend on public support.

"And indeed, what the public interventions have done has been to transfer risks from the private sector to the public sector. Another concern has to do with the health of banks in matured economies. Improved earning results in capital raisings have benefited both U.S. and European banks but fully addressing the problem of impaired assets from banks balance sheets remain an outstanding issue for both sides of the Atlantic."

The IMF official says as far as emerging markets are concerned the overall outlook remains vulnerable to downward revisions of global growth prospects and to constrained international bank lending.

Diane Bailey, United Nations Radio.

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