by Wang Xiuqiong

    ISTANBUL, Oct. 5 (Xinhua) -- When last annual meetings of the International Monetary Fund (IMF) and the World Bank held in Washington last October, finance officials faced a much darker picture than they do today. Tension was high and panic pervaded, a month after Lehman Brothers' bankruptcy and Merrill Lynch's buyout unsettled Wall Street.

    A year later, policymakers gathering in the biggest Turkish city of Istanbul see a brighter future as economies seemed to be pulling out of the downturn. But the world economy is still in a crucial juncture as the scenario of recovery is clouded by multiple challenges.

    Wise decisions and firm actions are all the more crucial now as a reversal can deal a severer blow to the still healing economy and, more importantly, confidence.

    The world economy is predicted to return to a growth of 3.1 percent next year after an estimated 1.1 percent contraction this year as recession is ending, said the IMF in a report released ahead of the meetings.

    The projection for 2009 was an upward revision of 0.6 percent from the IMF's April forecast, reflecting the changes the world economy went through in the past year.

    Sweeping credit meltdown and plummeting world trade had brought the world economy to the brink of collapse and pushed 90 million people into poverty before signs of mending emerged in the second quarter.

    In an unprecedentedly strong will to collaborate, governments rolled out massive stimulus projects, poured trillions of U.S. dollars into beleaguered banks and reduced interest rates to historic lows or even near zero levels.

    The efforts paid off. Industrial output drops slowed in recent months, as consumption lifted on government subsidies and emerging economies like China and India showed resilience against the recession.

    However, finance leaders and economic officials will face a bundle of uncertainties when discussing solutions in the Istanbul meetings.

    "Economic growth is resuming but that does not mean the crisis is behind us," said IMF Managing Director Dominique Strauss-Kahn on Friday, citing rising unemployment and concerns that private demand will be too weak to take over after effect of public spending wanes.

    Unlike the rapidly-spreading and powerful crisis, the recovery is set to be slow and fragile. Financial markets remain far from stable, jobs are still diminishing, protectionism is on an alarming rise and poverty is exacerbated in low-income countries.

    That requires determination not to give way to complacency and impetus of reforms to be maintained, which attendees of the meetings should bear in mind.

Special Report:  Global Financial Crisis