WASHINGTON (Bloomberg) — Revised forecasts from the International Monetary Fund and World Bank indicate weakness in the global economy this year will be followed by a stronger-than-expected recovery in 2010.

The IMF, which has rescued countries from Iceland to Pakistan in the past year, raised its forecast for global growth in 2010 to 2.4 percent from 1.9 percent, a person familiar with the matter said. The World Bank today predicted the world economy will shrink almost three percent this year, almost double what it projected in March.

Confidence in the global economy rose for a third month in June as US payroll losses slowed and worldwide production improved, a Bloomberg survey of users on six continents showed yesterday. Data today showed US retail sales rose in May for the first time in three months, and the number of Americans filing for unemployment insurance fell for the third time in four weeks.

"Economies are beginning to turn around and are likely to recover later this year and in 2010," said Thomas Mayer, co-head of global economics at Deutsche Bank AG in London. He said that steps to stabilise the financial industry are a "crucial element in the recovery" and have show signs of progress in the US and UK.

The new forecast from the 185-member IMF is contained in a report prepared ahead of weekend talks in Lecce, Italy, of finance ministers from the Group of Eight economies. The Washington-based lender made its previous projection in April. The fund's figures are the latest sign that the world economy may be through the worst of its deepest recession in half a century.

"Developed economies seem to be contracting at a slower pace," World Bank president Robert Zoellick said yesterday in a conference call with reporters. Still, the World Bank, established after World War II to help eradicate poverty, cut its global economic outlook for this year, citing rising unemployment and weak production.

The Washington-based lender to poor nations projects the world economy will shrink "close to three percent", compared with a 1.7 percent contraction forecast in March, the bank said yesterday in a statement. In its outlook released in April, the IMF predicted a 1.3 percent contraction this year.