US recession 'seems to be ending'; Recovery to be gradual: IMF

The sharp fall in the economic output of the world's largest economy, the United States seems to be ending but the recovery is likely to be gradual as there are still some financial strains, the International Monetary Fund has said.

IMF in its annual report on the US said: "As a result of their increasingly strong and comprehensive policy measures, the sharp fall in economic output seems to be ending, and confidence in financial stability has strengthened."

IMF has projected the real GDP for the United States for 2009 at negative 2.6 per cent, and for the year 2010, it would improve significantly and was pegged at 0.8 per cent.

However, as some financial strains are still round the corner, the recovery is likely to be gradual. "With financial strains still elevated, the recovery is likely to be gradual, and risks are tilted to the downside," the IMF report said.

The prospect in the job market however remains weak as the unemployment rate for United States is on an uptrend. The unemployment rate for US which was as low as 5.5 per cent in 2004 is likely to touch 9.3 per cent in 2009 and would further deteriorate to 10.1 per cent in the year 2010, IMF added.
As per the IMF executive board assessment, policies under the Financial Stability Plan like-- stress tests, debt guarantees, and capital injections-- have contributed to a significant improvement in financial conditions.