Istanbul  - The worst may be over, but Europe will still face a sluggish recovery in coming years that is underlined by high unemployment, the International Monetary Fund said Thursday.

In its semi-annual World Economic Outlook, the IMF revised upwards its forecasts for growth on the continent in the coming years. Most of Europe's economies have already emerged from their worst recession since World War II.

The euro area will inch its way out of recession in 2010, growing 0.3 per cent over the year after shrinking 4.2 per cent in 2009. In July, the IMF still predicted a 0.3-per-cent contraction next year.

Yet unemployment will continue to surge: the IMF predicts the region's jobless rate will hit nearly 12 per cent by 2011. Spain, which has been hit by a massive housing downturn, will see its jobless rate top 20 per cent.

The recovery will be uneven across Europe. Germany and France have already emerged from recession and Britain will soon follow suit. But some European economies will shrink well into 2010, including Spain, the Baltic region and parts of Eastern Europe. Sharp rebounds will occur in others, including Poland and Turkey.

Germany, Europe's largest economy, will grow 0.3 per cent in 2010 - revised from July's forecast of a 0.6-per-cent contraction - after tumbling 5.3 per cent this year due to the country's heavy dependence on exports. France and Britain will grow 0.9 per cent in 2010.

The IMF said the world economy will shrink 1.1 per cent this year before growing 3.1 per cent in 2010 - up from a July forecast of 2.5 per cent for 2010.

The IMF said that ongoing struggles in Europe's financial sectors would continue to put pressure on the wider economy. Credit availability is still "heavily impaired."

The European Union is in the middle of undergoing a series of "stress tests" to gauge the health of its banks. (dpa)