London, 21 January 2010

The global recovery, which began in Asian emerging markets, is now well under way. Uncertainty remains, however, about the sustainability of demand once the inventory cycle has run its course and stimulus is withdrawn.

• The Economist Intelligence Unit has revised up its forecast for world growth in 2010 to 3.6% at purchasing power parity (PPP), from 3.5% previously. This largely reflects a further upgrade to our forecast for China in 2010, to 9.5%, from 9.3% previously. Our forecasts for the US, the euro zone and Japan in 2010 are broadly unchanged. Our forecast for global growth at PPP in 2011 is also unchanged from our previous report, at 3.5%. At market rates, expansion will be slower, at 2.7% in 2010 and 2.4% in 2011.

• Exits from the emergency measures taken since 2007 to combat the downturn will dominate policy in many countries in the early years of the forecast period. The Federal Reserve and the European Central Bank (ECB) will both unwind unorthodox policy measures in 2010. The Fed will also raise its policy rate in the third quarter of this year. The ECB's first policy rate rise will come in 2011.

• Fiscal stress will also loom large over the forecast period, particularly in the US, the euro zone, the UK and parts of eastern Europe. Rising concerns about fiscal sustainability could contribute to market turbulence.

• Notwithstanding likely volatility, we maintain our forecast for US dollar appreciation in the second half of 2010 as investors anticipate Fed rate rises. We expect little substantive change to China's exchange-rate regime and maintain our forecast for a return to a mild strengthening of the Chinese currency against the US dollar.

• Our base metal price forecasts have been revised up to reflect the strong rise in prices at the end of 2009 and persistently strong demand from China, particularly in the first half of this year.

The Economist Intelligence Unit's forecasts are featured in the Global Forecasting Service, a new website that provides businesses with reliable projections for the global economy over a five-year period. The service also includes forecasts for commodity prices, exchange rates and world trade, and analysis of the main risk scenarios facing the global economy.

Speaking at the launch of the new service, Robin Bew, Editorial Director at the  Economist Intelligence Unit said: "The new Global Forecasting Service is the first in an exciting new generation of online services that will help organisations get a clearer picture of the world around them. We are particularly pleased that this new site allows us to offer subscribers our forecasts in a variety of formats, from traditional text-based reporting to interactive charts, video and webinars."

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More information on the Global Forecasting Service can be found at http://gfs.eiu.com/about

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