US to see solid recovery in mid-2010: IMF

Asserting that the American financial system has stabilsed, the International Monetary Fund (IMF) has said the world's largest economy will see "solid" recovery in the middle of next year.

The multilateral lender, however, has forecast a weak economic outlook for the near term.

"A strong monetary and fiscal policy response is supporting the US economy, but the immediate outlook remains weak, with a solid recovery beginning in the middle of next year," the IMF said in its annual review of the US economy.

The final review report is expected next month.

The global lending agency noted that the country's financial system has "stabilised" while the downward trend in labour and housing indicators have slowed.

"Significant risks continue to linger, including more foreclosures and further drops in housing prices, rising unemployment, and higher interest rates," the IMF said in a statement.

According to IMF, the fiscal stimulus packages by the US Federal government has helped in softening the blow from the raging financial turmoil.

The current economic turmoil has its roots in the subprime crisis that turned severe in September 2008 following the bankruptcy of Lehman Brothers, which rattled the global financial system.