The Organization for Economic Cooperation and Development (OECD) asserts that government measures will lead to global growth in 2010 and have already resulted in modest recoveries for some economies. The GDP of OECD countries is forecast to grow 1.9% in 2010, in comparison to a 3.5% decline in 2009. OECD countries will benefit from economic rebounds in non-OECD economies due to an increase in world trade. In addition, the OECD expects that all OECD countries will begin withdrawing fiscal stimuli by 2011.

North America

The OECD predicts that US GDP will grow 2.5% in 2010, following a 2.5% decrease in 2009. The International Monetary Fund (IMF) forecasts US GDP will increase 1.5% in 2010 and estimates GDP declined 2.7% in 2009. The December 2009 “Global Business Outlook” survey conducted by Duke University and CFO, which interviewed 1,431 CFOs from public and private companies worldwide, supports the growth forecast. According to 567 US CFOs, the spending increases by their companies on R&D and capital expenditures in 2010 will be the highest since 2008’s survey, increasing 1.3% and 1.5% on average, respectively. According to the survey, US firms plan to maintain strong cash reserves in 2010.

Europe

The Euro Area exited its recession in the third quarter of 2009, according to Eurostat. The OECD and IMF estimate that in 2009 GDP for Euro Area countries fell 4.0% and 4.2%, but is expected to grow 0.9% and 0.3% this year, respectively. The IMF posits that after a 5.3% decline in 2009, German GDP will increase 0.3% in 2010. The OECD estimates that it will increase 1.4% in 2010, up from 2009’s 4.9% decline. The OECD estimates the same growth rate for France, an increase from a 2.3% decline in 2009. The IMF estimates that France’s GDP will increase three times faster than Germany’s to rise 0.9% in 2010. Both the IMF and OECD estimate moderate GDP growth for the UK of 0.9% and 1.2%, respective increases from declines of 4.4% and 4.7% in 2009. According to the CFO survey, 184 European CFOs reported that their companies’ 2010 R&D spending will increase 2.3% on average, but that capital spending will fall 3.7% on average.

Asia

According to the IMF, emerging Asia, which consists of 26 countries and excludes Japan and Korea, will grow 6.8% in 2010, up from 5.0% growth in 2009. The Asian Development Bank (ADB) states that Asia will grow 6.4% in 2010, compared to 3.9% growth last year. The ADB also estimates that growth in East Asia, which includes China and four other countries, will be 7.1% in 2010. The ADB estimates that South Asia, where India is expected to have the highest growth among eight countries, will grow 6.8% in 2010. Growth in Southeast Asia, which is made up of 10 countries including Singapore and Thailand, will be 4.3%. The OECD predicts Korea will grow 4.4% in 2010, up from 0.1% growth in 2009. The IMF and ADB predict Korea will grow 3.6% and 4.0%, compared to declines of 1.0% and 2.0% in 2009, respectively. The 334 CFOs in Asia (excluding China) that took the CFO survey indicated that their companies’ R&D and capital expenditures will increase 5.7% and 16.0% on average, respectively, in 2010.

China

The OECD estimates China’s GDP will grow 10.2% in 2010, up from 8.3% growth in 2009. Similarly, the ADB projects 8.9% growth for 2010, an increase from 8.2% growth in 2009. The IMF forecasts Chinese GDP will rise 9.0% in 2010, up from 8.5% in 2009. The CFO survey found that 346 CFOs at Chinese companies plan to boost their companies’ R&D and capital expenditures an average of 8.0% and 7.8% in 2010, respectively.

India

The IMF estimates India’s growth rate to be 6.4% in 2010, up from 5.4% growth in 2009. The OECD projects 2010 GDP growth of 7.3%, up from the 2009 growth rate of 6.1%. The ADB forecasts a 2010 growth of 7.0%, an increase from growth of 6.0% in 2009.

Japan

According to the Japanese Cabinet Office, Japan exited its recession in the second quarter of 2009. The OECD and IMF predict that Japan’s GDP will grow 1.8% and 1.7% in 2010, compared to declines of 5.3% and 5.4% in 2009, respectively. The Bank of Japan estimates that in 2010 the country’s GDP will grow 0.7%–1.5%.

Latin America

The IMF states that “Western Hemisphere” countries (Latin America, Mexico and Caribbean nations) are recovering. In 2010, GDP is estimated to rise 2.9%, a reversal from the 2.5% decline last year. The OECD and IMF predict that Brazil’s 2010 GDP will rise 4.8% and 3.5%, respectively. The OECD estimates that Brazil’s GDP was 0.0% last year, while the IMF states that it fell 0.7%. The OECD and the IMF estimate that Chile’s GDP fell 1.8% and 1.7% in 2009, but that it will grow 4.1% and 4.0% in 2010, respectively. The IMF’s estimate of 1.5% growth for Argentina in 2010 would be an improvement over the country’s 2009 decline of 2.5%.

Chart: Region Growth Predictions for 2010

2009-10

Region

Japan 3.7%

Rest of World 3.9%

Latin America 4.7%

Europe 4.9%

US and Canada 5.3%

Asia Pacific 7.2%

China 8.8%