From The Straits Times
By AFP
Published 21 Jan 2010 GENEVA - THE world economy will bounce back in 2010 with growth of 2.4 per cent but could slump back into recession if state stimulus spending is wound up too early, the United Nations said on Wednesday.
The UN's preliminary report on the 'World Economic Situation and Prospects 2010' cautioned that a 'premature' removal of state support could trigger the second part of a 'double dip recession' after last year's contraction.
World gross product fell by an estimated 2.2 per cent in 2009, UN economic bodies estimated in the report. 'Premised on a continued supportive policy stance worldwide, a mild growth of 2.4 per cent is forecast' for 2010, the report added.
'Mild' growth of five per cent in world trade volume was forecast for this year, after falling by a record 13 per cent last year.
The UN warned that the recovery was uneven and conditions for sustained growth were fragile, with consumer demand and investment remaining weak as unemployment continued to rise, especially in wealthy nations.
It cautioned against any early move by governments to unwind a total of about US$2.6 trillion (S$3.6 trillion) of economic stimulus measures for 2009-2010 in the wake of the financial and economic crises.
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