According to Mr John Lipsky first deputy managing director of International Monetary Fund, the global economy could still worsen and consumer demand is unlikely to recover as strongly as it has in the past. The official is concerned about downside risks to the economy.

He told reporters that “This is absolutely not the time for complacency.”

He added that Japan’s recovery prospects hinge on the health of foreign markets given the country’s heavy dependence on exports.

Mr Lipsky said that emerging nations would be at the vanguard of a recovery from the current Great Recession, followed by advanced economies, which should return to positive growth in 2010.

He added that while that would be good news for Japan, the fallout from the credit crunch means that people may not be rushing back to the shops as quickly as they did during previous recoveries.

Mr Lipsky said that “Consumer demand in some of the advanced economies such as the US may not recover as strongly as it did in the past.”

(Sourced from AFP)