World economy to bounce back in 2010: UN

Massive and concerted measures from the world's major economies have contributed to a global economic recovery expected next year, the UN said Wednesday.

The UN said in a survey that world economic growth is expected to register a mild 2.4 percent in 2010. But it warned rich countries not to rush to cut back on stimulus packages and to prevent a downfall of the US dollar.

"The recovery is fragile," the UN said. "Firms have mainly begun to restock inventories, rather than respond to stronger consumer or investment demand."

The UN said governments worldwide have provided a total of $2.6 trillion in stimulus measures in 2009 that will reach into 2010. An official who briefed reportes noted that another $20 trillion of global taxpayer money could be tapped for financial sector

rescue operations.

The report - called the UN World Economic Situation and Prospects 2010 - said a number of economies have shown positive growth in the second quarter and the recovery momentum has continued in the third quarter of this year.

"Nonetheless, because of the steep downturn in the beginning of the year, world gross product (WGP) is estimated to fall by 2.2 percent for the year," the survey said.

"Premised on the assumption of a continued supportive policy stance, worldwide a mild growth of 2.4 percent is forecast in the baseline scenario for 2010," it said. "In this scenario, the level of world economic activity will be 7 percent below where it could have been if pre-crisis growth would have continued."

The UN said global economic recovery would remain sluggish and unemployment rates will stay up while inflation will remain low.