Although global forecasts are less dreary, Maren Baldauf-Cunnington warn that not all is rosy on the horizon

With all the talk about increasing signs of economic 鈥済reen shoots鈥� in recent months, it was perhaps too easy to suddenly relax and think that the good times are just around the corner.

The OECD鈥檚 Economic Outlook published this week provided a much more sober picture of recovery prospects and was a reminder of where we are and what we should or shouldn鈥檛 expect over the next years.The report says that the global recession is close to bottoming out, but recovery prospects are weak. Whilst strong policy responses helped to prevent an even worse economic outcome, the world economy should not expect to get back to business as usual once the recession ends. The wounds inflicted by the crisis will take a long time to heal.

For the UK, the OECD鈥檚 2009 forecast is weaker (-4.3%) than in its last outlook in March, when it predicted GDP to shrink by 3.7%, but it is marginally more upbeat about 2010, seeing output stagnating rather than contracting by 0.2%.

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