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IMF says global recession ending due to resurgence in China and India

By Hendrik L Clarke for CEOWORLD Magazine Updated:October 1, 2009

The International Monetary Fund (IMF) said Thursday that the global recession is ending due to strong public policies and a resurgence in Asia.

Rapid growth in developing Asian countries like China and India is driving the global economy on its path to recovery.

The IMF said that while the region’s overall real GDP is forecast at 4.25 percent in 2010, oil importers are expected to see real growth of 4.5 percent, or more than triple the level of oil exporters which still are susceptible to volatility in the global oil market. Overall, global economic growth is forecast at 3.1 percent in 2010, with much of the recovery driven by emerging economies such as China and India.

“The global economy appears to be expanding again, pulled up by the strong performance of Asian economies and stabilization or modest recovery elsewhere,” the IMF said in its semi-annual World Economic Outlook (WEO) released here Thursday.

The IMF projected the global output to contract at 1.1 percent in 2009, 0.3 percentage points lower than that projected in the update report in July, but the growth in 2010 will reach 3.1 percent, 0.6 percentage points higher than the previous projection.

Advanced economies are projected to expand sluggishly through much of 2010, with unemployment continuing to rise until later in the year. Annual growth in 2010 is projected to be about 1.3 percent, following a contraction of 3.4 percent in 2009.

“In the advanced economies, unprecedented public intervention has stabilized activity and has even fostered a return to modest growth in several economies,” the report said.

The projection for U.S. growth in 2009 as a whole is minus 2.7 percent, but has been improved to 1.5 percent in 2010.

The downward slide in Japan moderated during the fist half of 2009 and the gross domestic development (GDP) of the world’s second largest economy is expected to contract 5.4 percent this year and grow 1.7 percent in 2010.

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