IMF: Global Еconomic Recovery 'Weakening'

The International Monetary Fund (IMF) has warned again of a weakening global economic recovery despite government efforts to stimulate growth.

The global economy is likely to grow at a slower rate than previously forecast over the next two years, the organisation said in its latest report.

It said it now expected the eurozone to remain in recession in 2013, having previously predicted growth.

The IMF said continued problems in the eurozone were weighing on the global economy.

"The euro area continues to pose a large downside risk to the global outlook," the IMF report said.

"In particular, risks of prolonged stagnation in the euro area as a whole will rise if the momentum for reform is not maintained."

The eurozone's economy is now forecast to shrink by 0.1% this year. Just three months ago the IMF had forecast 0.2% growth.

Overall, the world economy is now forecast to grow by 3.5% this year and 4.1% in 2014, 0.1 percentage points lower than stated in October's forecasts.

Most of that growth is predicted to come from developing economies, rather than the developed countries still emerging from recession.

"Most advanced economies face two challenges. First, they need steady and sustained fiscal consolidation. Second, financial sector reform must continue to decrease risks in the financial system," the report said.

"Addressing these challenges will support recovery and reduce downside risks."

Earlier this month, the World Bank also cut its global growth forecasts blaming the slow recovery of developed nations.