RECOVERY in 2010?

Cautious analysts hope for a beginning of a very slow recovery in the second half of 2010.

The US recovery still seems very distant.

US recovery still distant: Canada's top banker

OTTAWA (AFP) — The US economy may not emerge from recession until at least 2010, making it harder for Canada to stage its own recovery, Canada's central bank chief said Tuesday.
Thus, Canadians may have to temper expectations for their own dour economy, which is intricately tied to US fortunes, Bank of Canada Governor Mark Carney told a parliamentary committee on finance.
"The outlook for the global economy has deteriorated significantly in recent months," he told members of parliament. "The recession that originated in the United States is now spreading globally through confidence, financial and trade channels."
"We (now) expect that the eventual US recovery will be much slower than usual," he said. "We project that it will take two and half years from the onset of the recession for US GDP (gross domestic product) to return to its pre-recession level."
Carney blamed the US "sluggishness" on the lingering effects of a financial crisis caused by the meltdown of the US subprime mortgage market last year, and massive US job losses, compounding low consumer spending.
Decisions by the US and other Group of 20 nations in the coming weeks to "isolate toxic assets" from banks, improve regulatory frameworks and fund the International Monetary Fund (IMF), he said, "are vital" to Canada's economic recovery.
"If these national and multilateral measures are not timely, bold, and well-executed, Canada?s economic recovery will be both attenuated and delayed," he said.

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Recession could last long into 2010
David Gow in Brussels
guardian.co.uk, Wednesday 10 December 2008 15.13 GMT
Article history
The recession in the industrialised world will be longer and deeper than forecast so far and could spread to emerging economies such as China and India, the OECD and European commission warned today.

Klaus Schmidt-Hebbel, OECD chief economist, and Marco Buti, European commission director-general of economic affairs, both indicated that the projected recovery could be postponed until later in 2010.

Buti said the next commission forecasts for the EU and eurozone economies, to be published a month earlier than planned in January, would be significantly worse than those drawn up a few weeks ago.

Schmidt-Hebbel told a European Policy Centre conference the OECD would now change its forecast of just two weeks ago and extend the projected recession by at least a quarter, with unemployment peaking in 2010-11. The OECD is so far forecasting a rise of 8 million unemployed to 42 million in its area.

Their gloomy readings of global economic forecasts came as a leading German forecaster, the RWI institute, said Europe's biggest economy would contract by 2% in 2009 – the worst recession since 1949. France's industrial output collapsed by a record 7.2% last month.

Another was the likelihood that central banks, led by the US Federal Reserve which is expected to cut rates to 0.5% next week, would further ease monetary policy. But the impact of cuts to near-zero could take longer than usual to feed through.

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