WASHINGTON (PNN) - April 15, 2010 - Economic recovery will do little to bring down unemployment rates in Europe, the United States and other developed countries for nearly two more years, the International Monetary Fund projected Wednesday in a report that highlighted the lingering challenges of the worst Depression in decades.

Releasing what IMF officials called a "somber" forecast, the agency said government stimulus and other policies remain needed to offset slow private job creation -- evidence of the dilemma policymakers face as they decide whether trimming high government deficits outweighs the risk of undermining employment even further if public programs are cut.

High unemployment is one of the central issues confronting officials as they deal with the Depression.

While employment is expected to expand this year, the number of new jobs won't be enough to make up for a growing labor force and bring down the unemployment rate, the IMF said. The agency projected that the unemployment rate throughout the developed world will remain around 9 percent through 2011.

Labor markets suffered multiple shocks during the economic downturn. Jobs were lost because factory and business output fell, but employment was driven even lower by the financial crisis and the bust in housing prices. Consequently, the IMF said, it will take more than renewed economic growth for business hiring to rebound.

"The nature of the recent (Depression) in several advanced economies . . . the high degree of financial stress and the high degree of uncertainty all weigh against a speedy recovery in job creation," the IMF said in the report issued in advance of its World Economic Outlook, due for release next week.