The End of Global Recession?

Now, the club of rich industrialised nations, Organisation for Economic Co-operation and Development (OECD) has joined the debate. And it agrees with the investment banks. OECD says that the global recession is coming to an end faster than thought a few months ago and may in fact already be over. It believes the turnaround started in the emerging economies, especially China. However, OECD cautions that the pickup in economic activity continues to be dependent on government stimulus packages. Also, despite the improvement now in sight, OECD expects a contraction in GDPs of the major industrialised nations for 2009 as a whole due to the poor first half.

In our opinion, the optimism is not warranted at this stage. There are still genuine worries over unemployment data and housing prices. As Wilbur Ross, the investor famous for acquiring and turning around failed companies, recently said, "People are so desperate to hear positive news that they are drawing cheerful conclusions from negative data".