Economics Weekly by Lloyds TSB

After the worst global recession since the end of the Second World War last year, the world economy is set to recover in 2010. What do consensus forecasts suggest for the economic recovery in the year ahead?

A year of economic recovery, but potential market volatility

After the worst global recession since the end of the Second World War last year, the world economy is set to recover in 2010. What do consensus forecasts suggest for the economic recovery in the year ahead?

All of the G20 economies bar the UK – and it is due to report growth for Q4 – have posted positive gdp expansion in the second half of 2009. Hence it is clear that a widespread economic recovery is underway. This pick-up is a direct consequence of a massive, global co-ordinated fiscal and monetary loosening, mostly undertaken over the preceding twelve months. Some of that boost was unconventional, in terms of the direct and indirect help to financial markets and to companies. But the economic recovery remains fragile in some countries and though the policy loosening of the past year or so will have to be withdrawn, it will have to be done carefully. This is necessary so as not to derail the hard-fought, and costly, economic and financial market recovery now underway.

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