Global recovery to be subdued: Citi

"With financial conditions continuing to improve, we have become more confident that global activity is nearing the turning point. Nevertheless, we still expect that the pace of global recovery will be subdued," Citigroup Global Markets, the research arm of financial services major Citi said in a report.

According to the report, the American economy and much of the emerging world would "bottom later this year". However, Europe and Japan are anticipated to rebound next year.

Majority of the developed economies are in deep recession -- broadly defined as two consecutive quarters of negative growth -- in the wake of the raging financial turmoil.

The US GDP shrunk at a staggering pace of 6.1 per cent in the first quarter of this year and the authorities are also expecting the country's unemployment rate to rise in the coming months.

In the case of the UK, the report pointed out that the European economic major may need higher policy rates in 2010.