OTTAWA, Feb. 23 /CNW Telbec/ - Most developed countries have emerged from the grip of the global economic recession that began in late 2008, setting up the world economy for expansion of 2.9 per cent in 2010 - after contracting by 2.2 per cent in 2009, according to The Conference Board of Canada's World Outlook-Winter 2010.
"While this is good news, recovery will remain tepid compared to the level of growth that normally follows a steep recession," said Glen Hodgson, Chief Economist at the Conference Board. "We won't see more normal growth rates for the world economy until 2011 or 2012."
The Asia-Pacific region will lead the recovery, as real GDP in China is expected to expand by 10 per cent and India's economy will benefit from ongoing infrastructure spending and tourism revenues from the Commonwealth Games in Delhi.
Western Europe remains a worry as banks in the United Kingdom, Ireland, and Spain continue to cope with residential real estate meltdowns, in addition to troubled loans to Eastern Europe which are a serious concern for many euro zone banks. European recovery is subject to many financial risks and anemic growth of only 1.2 per cent is anticipated in 2010, led by Germany and France.
Latin America has weathered this global storm much better than past downturns and is poised for above-average growth of 3.6 per cent in 2010. Brazil and Chile, in particular, are set to record solid growth of close to 5 per cent and 4.6 per cent respectively this year.
In the U.S., the ongoing weakness in labour markets will result in a sluggish recovery, with economic growth of only 2.8 per cent expected in 2010.
"The world outlook remains risky; recovery is fragile - as recent events in Greece and Eastern Europe demonstrate. The road to recovery will not be smooth," Hodgson said.
The Conference Board's quarterly World Outlook examines the short-term economic outlook for the world's major economies.
SOURCE Conference Board of Canada
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