Considerable risks are still being faced by the global economy as a result of the ongoing European debt crisis, a new report has suggested.
According to the International Monetary Fund - an organisation comprising 187 countries - stresses in the euro area will see the economy in the region contract 0.5 per cent across 2012, which is markedly lower than the 1.6 per cent growth witnessed in 2011, Bloomberg reports.
The surveillance report, which has been prepared for the Group of 20 nations, showed world economic expansion will slow from the 3.8 per cent recorded last year to 3.3 per cent in the coming 12 months.
"Advanced economies are experiencing weak and bumpy growth, reflecting both the legacies from the crisis and spillovers from Europe," the report noted.
It added a risk remains that an "intensified paradox of thrift" might emerge, because demand across the globe is reduced by families, businesses and governments alike.
By Asim Shah