A global economic recovery is underway and will proceed at a faster rate than previously anticipated in 2010, say the Organisation for Economic Co-operation and Development (OECD).
In its latest Economic Outlook, the organisation almost trebled its growth prediction for its 30 members – including the UK – to 1.9% from 0.7%.
However, this will not be enough to tackle the issue of rising unemployment, which remains a major constraint on a sustained and rapid global recovery. This is particularly true in the Euro area, which is unlikely to see its jobless rate start to fall until 2011 at the earliest.
The OECD described the journey ahead as being "held back by substantial headwinds", such as many of the policies being used by governments across the world with the aim of speeding up the process. The UK’s quantitative easing programme is one.
"With millions of jobs lost and public budgets under strain, governments will have to tread carefully in the months ahead. Removing stimulus measures is imperative but such action has to be carried out gradually to avoid undermining the recovery," explained Secretary-General of the OECD, Angel Gurría.
Another issue is that household and business spending has stalled as they bid to repair their balance sheets and reduce debts, particularly with credit difficult to obtain and new orders equally low at present.
But hopefully, these barriers to growth will not be standing for much longer. Gurría added: "The good news is that the recovery – albeit a weak one – is underway."