While the August 2009 OECD composite leading indicators point to recovery in all the major economies, and most emerging markets have recorded a strong economic performance in the third quarter of 2009 and leading indicators point to further improvements ahead, it is not time to celebrate, said central bank Governor Tito Mboweni on Saturday.

Speaking at the 12th Kgosi Edward Patrick Lebone Molotlegi (EPL) Annual Memorial Lecture, Phokeng, on 10 October, he said that while there are signs that the global economic recovery is well under way, there are still numerous challenges ahead.

"The pace of recovery is likely to be slow, protracted and uneven across countries," said Mboweni.

He noted that projections released by the IMF last week indicate that world growth is expected to average –1.1 percent in 2009 as compared to –1.4 percent envisaged in July 2009.

"Of interest is that the world economy is expected to grow at an estimated 3.1 percent in 2010. This represents a 0.6 percentage point upward revision to the forecasts released three months ago. It is encouraging to note that much of this growth is being underpinned by the emerging and developing countries which are expected to grow at 5.1 percent in 2010 compared with four percent, and seven percent projected in July 2009," said Mboweni.

The HSBC Emerging Markets Index (EMI) released recently, which is meant to reflect economic conditions and prospects in developing countries, provides additional support to the view that emerging markets will lead the global economic recovery.

"As we meet here today, we are all too mindful of the fact that we are in the midst of one of the most severe economic recessions since the 1930s. We all know the trigger point of the crisis, being the US subprime housing market and its subsequent spread through the banking sector and financial markets. The collateral damage has been of unimaginable proportions. Today, the US investment banking model is all but a thing of the past, more regulations for banks are on the way (bankers are not trusted anymore!) and many reputations have been damaged," said Mboweni.

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