IMF upgrades economic forecast

WASHINGTON, July 8 (UPI) -- The International Monetary Fund in Washington projected a slightly improved economic forecast for the global economy Wednesday.

The IMF upgraded April's prediction one half of a percentage point, calling for global output to increase 2.5 percent in 2010.

The World Economic Outlook Update said industrial production in the United States "may be close to bottoming out, the inventory cycle is turning and business and consumer confidence has improved."

In Japan, "following a dismal first quarter, there are signs output is stabilizing," the report said.

"Strong performance by some other Asian economies are expected to life growth in the coming quarters," IMF said.

IMF Chief Economist Oliver Blanchard said there was good news and bad news.

The good news: "Forces pulling the economy down are decreasing in intensity," he said.

The bad news: "The recovery is coming. But it is likely to be a weak recovery."

While "financial conditions have improved more than expected," the report predicted a sluggish return to growth with global output dropping 1.4 percent this year, before rebounding to a 2.5 gain in 2010.