The International Monetary Fund (IMF) has raised its forecast for global growth this year, from 4.2 per cent to 4.6 per cent, according to the British Broadcasting Corporation, reported on Friday.

It said the world economy grew strongly in the first part of this year, mainly thanks to robust growth in Asia.

However, the United Kingdom was almost unique in having its 2010 growth forecast revised slightly down, while its 2011 forecast was cut by the IMF from 2.5 per cent to 2.1 per cent.

The IMF also warned risks had increased and there had been a setback in progress towards financial stability.

Developed economies have maintained a modest, but steady recovery in the year to date, the supranational agency said.

Concerns over the sustainability of government finances in the developed world, especially Greece and others in Europe, were the major threat to global recovery, the IMF argued.

It said governments should focus on improving their finances, but warned them not to make cutbacks too rapidly.

In recent weeks, a number of governments have introduced austerity measures to cut deficit levels.

“Further credible and decisive policy action is needed to resume progress on financial stability and keep the economic recovery on track,” said Jose Vinals, director of the fund‘s monetary and capital markets division.

The IMF said that European banks in particular were being affected by the concerns about government debt and so were less willing to lend to each other. Less credit available to the wider economy could undermine the recovery, it argued.

Although contagion to other regions of the world was likely to be limited, there was a risk that Europe‘s troubles could have a more substantial impact on global economic growth, it said.