After braving the worst recession since World War II, the global economy appears to be growing. Policy makers and central bankers have now shifted their focus from crisis-fighting to figuring out how to establish a safer global financial system for the future.

The US economic recession that started in December 2007 is the longest and deepest since the 1930s and was triggered by the US housing market's collapse and the ensuing global credit crisis. After a deep recession, global economic growth turned positive, driven by reduced uncertainty and systematic risk in financial markets. The economic crisis that lasted over two years is finally on the mend, as financial markets are healing and in most countries growth has turned positive. There is a clear sense of optimism around today. After contracting by about 1% in 2009, the IMF now expects that the world economic growth will expand by about 3% in 2010, led by a strong rebound in the fast-growing Asian economies.

According to the Organization for Economic Cooperation and Development (OECD), the worst global recession since World War II is ending faster than previously thought, but the recovery will still be a slow one. Most forecasters expect that the pace of recovery will be tepid, especially in the industrial economies where unemployment is continuing to rise. Institutions like the IMF are of the view that the recovery is feeble because the US consumer, who accounts for more than 70% of spending, is still buried in debt and joblessness. Moreover, the biggest US industries like housing and finance are still struggling. Even though the global economy seems to be recovering from its worst recession in over 60 years, the IMF warned politicians and financial markets against complacency. The world economy is still in the grip of rising unemployment, which has cast a long shadow over the recovery.

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