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Signs of recovery in the global economy

Signs of recovery in the global economy article image
The International Monetary Fund (IMF) has revised up its forecast for global gross domestic product. Initially the IMF predicted a 2.6 percent decline for this year, but has now updated its forecast to a slightly better 2.3 percent decline. It predicts growth of 2.3 percent in 2010. Dougal Crawford, senior economist at government credit agency the Export Finance and Insurance Corporation, believes aggressive public policy in both advanced and developing countries has played a significant part in the recovery. "Clearly, public policy has supported output, limited the collapse in the global financial system and boosted confidence," he said. Despite signs of recovery, growth will be restricted by the private sectors in the major industrialised economies repairing their balance sheets and high unemployment. And although the housing market in the US was steady, "housing activity remains very subdued and any recovery will be constrained by high unemployment, households focusing on rebuilding savings and a large stock of unsold existing homes," he said.

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