The world's leading economies are in or near liquidity-trap conditions, as low interest rates fail to stimulate consumer spending. These trends indicate that the odds of another recession are higher than generally perceived and the much-feared double-dip recession could be a reality.

A midst growing concerns that both the US and Europe may be sliding into Japanese-style deflation, economists warn that a global double-dip recession is unavoidable. The trend was triggered by a vast global surplus of money against easy monetary policies adopted by major economies to stimulate their economic growth. With the financial crisis in Europe and Japan's economic woes continuing and the US economic outlook remaining unusually uncertain, double-dip is the word on everybody's lips, making many of those lips shudder. The causes of a double-dip recession vary, but often include a weak demand for goods and services due to layoffs and spending cuts from the previous recession. Investopedia explains double-dip recession thus: "A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession."

The surveys on the global economy over the past six months reveal that a V-shaped recovery has remained constant, but references to a double-dip have soared. Realizing this risk, the International Monetary Fund (IMF) says that the recent market turbulence has cast a cloud over the outlook. The IMF estimates that Eurozone would suffer a serious double-dip and a second downturn in Europe could lead to a global fallout. Against this backdrop, economists predict an extended period of relatively sluggish industrial country growth, capped by poor credit availability.

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