The world economy has returned to a growth path following the sharp downturn in late 2008 and the first quarter of 2009. Analysts expect it to resume growth in 2010, although at a low level. This recovery is supported by government stimulus programs and the central banks’ liquidity-driven monetary policies. It is still unclear, though, whether the upturn has enough momentum to be long term and self-sustaining. The World Bank forecasts that the global economy will grow by 2.7% in 2010. For 2011, it predicts growth of 3.2%.
The US economy will return to growth in 2010, ending its worst recession since the end of WWII. The Organization for Economic Cooperation and Development (OECD) forecasts economic gains of 2.5% there. In 2011, the US economy is expected to grow 2.8%. Analysts continue to foresee a slow US recovery. High unemployment is the primary factor still negatively impacting private consumption, which accounts for about two-thirds of GDP there.
Asia will make significant gains in 2010. The Asian Development Bank (ADB) expects the region’s economy to grow 6.4%. China and India, with their vast markets, will perform particularly strongly, with the ADB expecting India to grow 7.0% and China 8.9% in 2010. The Chinese government continues to support growth via infrastructure projects. In contrast, Japan will trail behind. The OECD forecasts Japanese GDP gains of 1.8% in 2010 and 2.0% in 2011.
Europe, including Germany, is also expected to show renewed growth. The OECD anticipates eurozone growth of 0.9% in 2010 and 1.7% in 2011. German GDP might put in a slightly better performance. According to OECD estimates, it will gain 1.4% in 2010 and 1.9% in 2011 – primarily driven by rising exports.