There is a lot of talk at the moment about an end to the recession.
But a sustained improvement in the global economic outlook is not yet a certainty, according to Dun and Bradstreet's latest global economic and risk outlook report.
According to the report - high unemployment, tight credit and rapidly rising borrowing by governments negatively impacts the short-term outlook.
However, the local outlook is more promising, particularly on the back of June quarter GDP figures which show the economy grew by 0.1 percent (the first expansion in six quarters).
The quarterly Global Economic & Risk Outlook Report states that governments’ fiscal stimulus measures and a rebuilding of inventories (following an unprecedented run-down of stocks earlier in the year) are the two key factors currently supporting economic activity.
However, it argues that these actions are not enough to ensure a sustained improvement in the global economic outlook. Consequently, D&B is forecasting that global GDP will contract by 2.8 percent in 2009 before returning to growth of 1.3 percent in 2010.
The D&B report suggests that central banks will maintain loose monetary policies during the rest of 2009 and into 2010 to ensure that economic activity continues to be supported but warns that large increases in money supply could spur inflationary pressures once economic activity picks up in earnest.
This could necessitate a potentially sharp tightening of monetary policy.
John Scott, Dun and Bradstreet's general manager, talks about the latest report.