The International Monetary Fund says the global economy is recovering more quickly than its October forecast anticipated.

The IMF is now projecting world economic output will grow 3.9 per cent this year, up from the previous estimate of 3.1 per cent.

The IMF expects Canada's economy to expand by 2.6 per cent in 2010. (Adrian Wyld/Canadian Press)

The Washington-based international organization says the economic recovery is strongest in Asia's emerging economies.

Growth in emerging and developing economies is expected to rise to about six per cent in 2010, following a modest two per cent in 2009. The new projection reflects an upward revision of almost one percentage point.

The IMF did, however, warn that much of the expected growth stems from government stimulus dollars, something that can't continue forever. "There are still few indications that autonomous (not-policy-induced) private demand is taking hold, at least in advanced economies," the agency said.

China's economy is now expected to grow by 10 per cent this year over 2009, when the global slowdown reduced growth to a relatively modest 8.5 per cent.

In contrast, the U.S. economy is projected to grow just 2.7 per cent in 2010 after declining an estimated 2.5 per cent in 2009.

The agency also changed its forecast for the Canadian economy, hiking the projected growth for 2010 to 2.6 per cent, half a percentage point above the last projection. The forecast for 2011 was unchanged at 3.6 per cent growth.

The IMF's forecast for Canada is slightly more bearish than that of the Bank of Canada, which predicted 2.9 per cent growth in GDP in 2010 last week.