Global economy seems to have bottomed out

Fears of a new Great Depression, all too real after Lehman Brothers collapsed a year ago, have abated as the global economy emerges from the depths of recession with the help of massive government intervention.      Nothing so dire has materialised and forecasters believe the economy is already growing once again after a recession that may well enter the record books as the worst since the depression of 1929-33, but a very distant second. Cross-border trade is showing renewed signs of life, regular business surveys have been suggesting stabilisation since March, triggering a sharp rise in stock markets, and now forecasters such as the OECD are saying the downturn is coming to an end.      Marc Touati, economics research chief at Global Equities, a French financial services brokerage, says fears of a 1929 rerun, like swine flu, will soon join SARS and the Y2K computer bug in the annals of economic calamities that never materialised. There is a big catch though. The economy is recovering thanks to trillions of dollars of central bank and government intervention and remains dependent on that public life support. The next challenge will be when and how fast to remove the fiscal and monetary stimulus that broke its fall, and doing so without causing a relapse or stoking excessive inflation.      The MSCI global share price index has been rising since the lows of March and has recovered about two thirds of the ground it lost since the Lehman bankruptcy filing on September 15 2008.      Truly global statistics are hard to come by but according to the Dutch Bureau for Economic Policy Analysis, which aggregates official data for some 70 countries, worldwide industrial output rose 2.0% from May levels, more than in any month on records going back to 1991. World trade volume rose 2.5% in June, the strongest since July 2008, says the state-funded Dutch agency.      "It's still likely to be a relatively slow recovery but even if it is it's a vastly superior performance than back in the 1930s," Jorgen Elmeskov, chief economist at OECD, said. OECD called an end to recession in the industrialised world on September 3. REUTERS LOOKING GOOD: US President Barack Obama's massive stimulus package has created up to 1.1m jobs, according to the White House. The $787bn package has also significantly boosted economic activity in the US. In a major speech on Monday in the symbolic surroundings of Federal Hall, New York, Obama will outline the steps he took after taking office at a time of investor panic