According to the International Monetary Fund the world economy will expand by 4.6% this year as opposed to 4.2% which they had previously predicted. If this does come to fruition, it will be the largest gain since 2007.

The IMF also commented that the US and Canada have led the advanced economies out of the worst recession since the last World War; this has also been helped by three of the BRIC countries Brazil, China and India: their faster expansion are helping the global recovery.

Although this is positive news, the IMF also warned that the sovereign-debt crisis in Europe is still an issue that needs addressing.

The IMF report said “The overarching policy challenge is to restore financial- market confidence without choking the recovery……The new forecasts hinge on implementation of policies to rebuild confidence and stability, particularly in the euro area.”

Although the revised figures are better than expected, the global economy still needs to weather the storm. There seems to be reduced confidence throughout the global markets and volatility is still an issue.

There are 91 banks within Europe currently undergoing stress tests to see whether they can cope with Europe’s shrinking economy and a reduction in government bond values. The regulators are counting on the larger European banks performing well in these tests to reassure investors.