Overall World Economic Prospects

News and Outlook for the Global Economy

The Copenhagen climate accord has failed to set targets for climate reduction, Bloomberg reports , causing the prices of European Union carbon certificates to decline further. Prices of such certificates have reached their lowest level since March due to doubts about future regulation and to decreased demand for such certificates during the recession. Nonetheless, the United States intends to cut emissions to 83-86% of what they were in 2005 by 2020, while the European Union is maintaining its existing plans to cut emissions to 80% of what they were in 1990 . Meanwhile, Reuters reports that China, India, Brazil, and South Africa formed an effective bloc in preventing the Copenhagen agreement from being legally binding, and predicts that they will be a force to be reckoned with in future climate discussions. Oil futures fell by 1% on Monday, the Wall Street Journal reports . The Journal attributes the change to a rising dollar , which made oil more expensive to holders of other currencies, and to decreased geopolitical tensions . The price had risen after Iranian troops seized an Iraqi oil well in a disputed border region, but those troops have since left. Cold weather (including the recent east coast snowstorm) had aided the increase by stimulating demand for oil. Early in 2010 oil and other commodity prices tended to rise, worsening the global outlook. The International Monetary Fund (IMF) projects that while global economic recovery has begun , it is likely to be quite gradual . IMF Chief Economist Oliver Blanchard has said that he expects GDP growth to generally remain positive , but cautioned that much of it depends on private investment and consumption strengthening as public stimulus plans are rolled back . The IMF predicts that the advanced economies will recover slowly, while the first improvements among developing countries will be seen primarily in Asia , although Africa and the Middle East are also likely to grow due to rising commodity prices . Meanwhile, the OECD also projects that the economies of the more economically advanced countries will recover slowly , with unemployment remaining high for some time (not falling until early 2010 in the United States, and as late as 2011 in the Euro Area) . The OECD blames the slow rate of recovery on the poor financial situation of households and businesses , which are likely to spend much of their incomes getting out of debt . It sees the slow rate of recovery causing inflation to remain low download