The global economy could still worsen and consumer demand is unlikely to recover as strongly as it has in the past, a senior IMF official said Tuesday.
The International Monetary Fund is concerned about "downside risks" to the economy, said the Fund's first deputy managing director John Lipsky.
"This is absolutely not the time for complacency," he told reporters here.
Japan's recovery prospects hinge on the health of foreign markets given the country's heavy dependence on exports, he said.
|An upmarket department store in Hyderabad, India in early May|
Emerging nations would be at the vanguard of a recovery from the current "Great Recession," followed by advanced economies, which should return to positive growth in 2010, Lipsky said.
While that would be good news for Japan, the fallout from the credit crunch means that people may not be rushing back to the shops as quickly as they did during previous recoveries, he said.
"Consumer demand in some of the advanced economies such as the US may not recover as strongly as it did in the past," Lipsky said.
The IMF last month projected the global economy would shrink 1.3 percent in 2009 but grow 1.9 percent in 2010.