According to a release from TD Economics today, the world economy is expected to expand by 3.8% in 2010. While this is positive, they also mention that
the road to recovery will not happen easily, or overnight.

While the recovery is underway, the report suggests that it will not develop the “head of stream” that was typical of past recoveries. As a rule of thumb, growth in real economic output during the first year of a recovery is generally two to three times greater than the decline in output was over the course of the recession. But when a recession is driven by a banking crisis, as was the recent global recession, an economy’s output grows more slowly for a number of years after the recovery has taken hold than is typically the case.

Canada’s economy is expected to grow at 2.7% next year.

The Royal Bank of Canada polls Canadian consumers regularly. Today, the results for the most recent poll were released. We’ve heard a lot in the news that the economy is getting better, but there’s been debate over whether it actually is improving, or whether people are just being optimistic. According to the Canadian Consumer Outlook, sixty-two percent of Canadians are expecting the economy to improve over the next year.

“Recovery is in sight for the world economy,” said Dawn Desjardins, assistant chief economist, RBC. “We’re off to a slow start but the economy will start to build steam and unemployment will reach its peak early next year and then fall off.”
Source

Living in Canada, in almost every province, we are all very familiar with the January thaw. It is that wonderful time in the middle of the winter when the snow banks melt and you hope that it might not snow anymore while knowing that there is a long winter ahead.

The economy is similar in the way it moves.

It is true that there are indicators that a rebound is beginning; gas prices are going up, unemployment is slowing and the stock market is coming out ahead at the end of the day instead of regular triple digit losses. Economists and banks are reporting the recession is bottoming out and that things will now begin to return to normal.

I really hope that this is true.

This reminds of the time in the not too distant past when we were told to invest in tech stocks because they were “rock solid.” The same rhetoric is now being used and it sounds like it is coming from the same people.
Like the weather forecasters will tell you, “enjoy the January thaw because winter will be back soon,” there are economists predicting another dip before recovery (spring) will begin. While this prediction is not certain it is better to err on the side of caution and try to get as much out of the government as you can while they are willing to give it.