The United Nations has forecast that the world economy will bounce back in 2010 with a global growth rate of 2.4 per cent, but it warned that the recovery will be fragile.
In a preview of its annual economic forecast which will be released next month, the UN credited the massive
fiscal
stimulus measures by governments worldwide since late 2008 for the expected rebound. It recommended that these
stimulus measures continue -- at least until there are clearer signals of a more robust recovery in terms of increasing
consumption, more private investment and rising employment rates around the world.
"Before that, it would be risky and even could be self-defeating to withdraw stimulus," said Rob Vos, director of the Economic Analysis Division in the UN's Department of Economic and Social Affairs.
The UN report said an increasing number of economies showed positive growth in the second quarter of 2009, with the recovery continuing in the third quarter. It pointed to increased industrial production, a rebound in global equity markets, and a rise in international trade.
"This is an important turnaround after the free fall in world trade, industrial production, asset prices, and global credit availability which threatened to push the global economy into the abyss of a new Great Depression in early
2009," the UN report said.