JOHANNESBURG: The International Monetary Fund (IMF) said on Tuesday the global economic recovery was gaining traction, but highlighted risks from the eurozone financial crisis.

The IMF said the two-speed global recovery -- with advanced economies growing significantly more modestly than emerging economies -- was shifting gears as economic powers the United States and Japan saw rising consumption.

"In advanced economies, activity has moderated less than expected, but growth remains subdued, unemployment is still high, and renewed stresses in the euro area periphery are contributing to downside risks," the IMF said in an update of its world economic forecasts.

The Washington-based institution released the latest updates in Johannesburg, South Africa, where top IMF officials were set to hold a news conference.

The IMF projected the global economy's output would expand by 4.4 percent in 2011.

That slightly higher than 4.2 percent annual rate projected in the fund's October projection.

"This reflects stronger-than-expected activity in the second half of 2010 as well as new policy initiatives in the United States that will boost activity this year," it said.

The annual pace, however, would still be slower than the five percent seen in 2010.

The IMF said a new U S fiscal package passed in late 2010 was expected to boost growth in the world's biggest economy by 0.5 percent.

The US economy had the sharpest markup by far: a 0.7 point gain to Gross Domestic Product (GDP) growth of 3.0 percent in 2011.

There was no change in the 1.5 percent growth forecast for the 17-nation eurozone or for Japan, where 1.5 percent growth is predicted.

Meanwhile for emerging economies, growth remained "buoyant" but inflation pressures were emerging and there were signs of overheating in part from capital inflows as investors chased higher yields.

Growth in the top two Asian engines, China and India, was unrevised at 9.6 percent and 8.4 percent, respectively.

Sub-Saharan Africa is predicted to produce the strongest growth of any region, at 5.8 percent.

But the IMF warned of risks from the financial and debt crises in peripheral eurozone countries, such as Greece and Ireland, and tepid progress in financial reforms.

"The most urgent requirements for robust recovery are comprehensive and rapid actions to overcome sovereign and financial troubles in the euro area and policies to redress fiscal imbalances and to repair and reform financial systems in advanced economies more generally," it said.

The IMF called for stepped-up eurozone financial support for member countries in need, among other measures, and better stress tests on banks.

"Markets remain skittish about potential losses in the region's banks and have not been assuaged by stress tests conducted to date."

Policymakers in the emerging economies, which account for more than two-thirds of global growth, should take steps to keep overheating pressures in check, the 187-nation institution said.

The IMF forecast commodity prices would remain high in 2011 in response to strong global demand as well as supply shocks for some commodities, in part due to weather-related crop damage.

The IMF sharply hiked its oil price per barrel estimate to nearly 90 dollar, from the October number of 79 dollar, citing robust demand and "a sluggish supply response to tightening market conditions."

Non-oil commodity prices would jump 11 percent.

Rising commodity prices would particularly pressure emerging and developing economies, but inflationary pressures would remain tame in advanced economies, where their lackluster recovery has left ample economic slack.

In a separate report on global finances, the IMF said that nearly four years after the largest financial crisis since the Great Depression, major policy challenges remained unaddressed.

"The time purchased with the extraordinary support measures of the past few years is running out," the fund said.

"There are concerns that systemic vulnerabilities may build up again before solid progress is made to prevent such a build-up."