While global equity markets have slightly improved this year a full recovery of the markets and the economy is not expected any time soon, so says John Hawksworth, head of macroeconomics at PricewaterhouseCoopers.

Since September 15, 2008 the Dow Jones Global Titans 50 fell 21.10%, while year-to-date the index is up 0.09% through June 15, 2009.

John Hawksworth, head of macroeconomics at PricewaterhouseCoopers said: "Globalisation was beneficial for both developed and especially emerging market economies over the decade to 2006.

"But the last two years have shown that globalisation also has a dark side as it allowed the build-up of large global trade imbalances and corresponding capital flows from the East that help to inflate unsustainable credit and housing market bubbles in the West. Once the crisis hit in the U.S. housing market initially, globalization of financial markets also meant that the credit crunch virus spread very rapidly around the world.

“Looking ahead, we expect a fall of around 2.5% in world GDP in 2009 but then a modest recovery to global growth of around 1% in 2010, led by China and India. I am more cautious about the prospects for Europe, including the euro zone countries for which we project a fall in GDP of more than 4% in 2009 followed by continued negative GDP growth of around -0.5% in 2010.

"In the longer term, the need to deal with rapidly increasing public debt will weigh down on the speed of economic recovery in the U.S., the U.K. and other high deficit countries and could also dampen the return on government bonds relative to equities over the next few years.”