The International Monetary Fund (IMF) predicts a not-so-rosy prospect for the global economy by the end of the current year, a trend that the lending institution said would only be sustained until the closing months of 2012.

According to IMF chief economist Olivier Blanchard, economic expansion for most economies would experience moderate advancements of no more than four percent in 2011 through 2012, which he said will be highlighted by softening productions coming from the United States and the European region.

Crunches in those two areas, however, will be cushioned by the spirited growths projected to characterise the economies of China, Brazil and India over the next 12 months or so as economists see the balance of economic might gradually swinging from the developed nations to the developing nations.

Cause for concern, Blanchard said, is the downgraded outlook for the American economy, which the IMF said will only move up by 1.5 percent in the present year and by 1.8 percent in the following, coming from the June forecast of 2.5 percent and 2.7 percent respectively.

Yet those numbers, the IMF stressed, will only be realised if accelerated growth would transpire later this year, which economists said would only be marked by a maximum of two percent growth in the period that may prove insufficient to address the country's high jobless rate.

"The global economy has entered a dangerous new phase ... recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks," Blanchard was quoted by The Associated Press as saying.

The same gloomy environment pervades in much of Europe, where the IMF said up to 17 nations will witness measly average growth of 1.6 percent in 2011 and 1.1 percent by 2012, also suffering downward revisions from previous forecasts of two percent and 1.7 percent respectively.

Blanchard said that the hovering debt and financial crises nagging the region largely contributed to the near-flat projections as he asserted that at the moment "fear of the unknown is high."

"Markets have clearly become more skeptical about the ability of many countries (in the region) to stabilize their public debt," the IMF economist told AP.