Global economy back on track

Surging business confidence in rich countries has put the global economy "back on track" to resume a steady recovery, according to the latest Brookings Institution-Financial Times tracking index. As the International Monetary Fund prepares for its annual meetings this week, the greatest fear among most economies is that mistakes in US fiscal or monetary policy will derail the fragile global upswing, said the Financial Times newspaper. Professor Eswar Prasad, a senior fellow at the Brookings Institution said: "It may be premature for policy makers to declare victory as the recovery is still tenuous and just a shock or two away from turning into another slump." Finance ministers and central bankers will gather in Washington this week with US policy in the spotlight as the US government shutdown and a looming debt ceiling crisis threatens to undermine the economy, and following hints of a monetary tightening by the Federal Reserve caused a summer of turmoil in emerging economies. Tracking Indices for the Global Economic Recovery, the Brookings Institution-Financial Times index of the world economy Tiger (Tracking Indexes for the Global Economic Recovery) shows the global economy "being borne along by surging business and consumer confidence in advanced economies, and stabilisation in the growth of emerging markets", said Prof Prasad. The overall levels of the index, which still languish well below the initial recovery period in late 2009 and early 2010, have improved from their recent lows in mid-2012.