FOREX-Major banks' economic outlooks for 2010

"The first point to note is that the global recession is over -- the quarter-on-quarter contractions in global GDP having ended in Q2 2009 (for the G10, Q3) -- and we think will stay over. Recessions are not the natural state for an economy and tend to self-correct over time, with counter-cyclical macro policy hastening the process.... Absent another major shock, which we do not expect, the global economy should continue on its recovery path. We forecast global growth of 4.2 percent in 2010.

"But developed world growth stands to be much weaker (2.0 percent) than growth in emerging economies (6.6 percent). The recovery we forecast (for the developed world) will not even make up the output lost in the recession. This is not just a matter of emerging economies having much higher potential growth rates than developed ones, which is the case.... We expect demand growth in the crisis-hit developed economies, notably the U.S., Europe and (for somewhat different reasons) Japan, to be muted for some time." >>

News - December 09