January 21, 2014 - 20:28 AMT
PanARMENIAN.Net - The International Monetary Fund (IMF) has sharply increased its growth forecast for the UK economy, BBC News reports.
It now expects the economy to grow 2.4% this year - faster than any other major European economy - against its previous forecast of 1.9%. In 2015, it expects growth of 2.2%.
The Treasury said the new UK forecast was further evidence that the government's economic plan was working.
The IMF also raised its global growth outlook slightly to 3.7%.
"Global growth is expected to increase in 2014 after having been stuck in a low gear in 2013," the IMF said in its report.
The world's largest economy, the U.S., is expected to grow by 2.8% this year, an improvement on the previous estimate of 2.6% that the IMF made in October.
It expects the euro area as a whole to grow by 1%. "The euro area is turning a corner from recession to recovery," the IMF said. However, it added the pickup would be weaker in economies that have been facing "financial stress", namely Greece, Spain, Cyprus, Italy and Portugal.
The IMF also upgraded its forecast for the Chinese economy to 7.5% this year.
But it also warned that "strengthening global growth does not mean that the global economy is out of the woods". It said governments in advanced economies must not withdraw measures to support growth prematurely.
Christine Lagarde, the IMF managing director, has previously expressed concerns about growth levels in the UK economy in light of the government's austerity drive, which is designed to reduce debt levels.
But the IMF upgraded its forecast for the UK in 2014 by more than for any other economy. It also raised its forecast for growth in 2015 to 2.2%.
"[The IMF] report provides further evidence that the government's long term economic plan is working," said a spokesperson for the Treasury. "But the job is not yet done and so the government will go on taking the difficult decisions necessary to deliver a sustainable recovery for all".