This augurs well for economic prospects in the world economy. In general the emerging economies are expected to benefit from a resurgence in external demand. However, it is important to realise that there are some risks that threaten the pace and magnitude of the global recovery. The volatile geopolitical environment surrounding the oil market is one such risk.
Further, with the upturn in economic activity, it is to be expected that government spending that helped to make the recession short-lived will be curtailed. In addition, expansionary monetary policy that has been a characteristic of the last year will become more contractionary to keep inflationary pressures in check.