TD Bank Financial Group has revised its forecast for how much the global economy will grow in 2010 by a full percentage point, to 3.8%.

“The global economic recovery is underway, and worries about a double-dip recession will likely prove unfounded,” TD chief economist Don Drummond wrote in the bank’s quarterly economic report on Wednesday.

The report notes that real estate markets that were the epicentre of the financial crisis in the United States and United Kingdom have now stabilized. After hitting historic lows earlier in the year, global inventories and consumer spending seem to have rebounded as well.

“Improved consumer and business confidence should also be reflected in a greater willingness to spend and invest,” Drummond said. “This is how economies have climbed out of recessions before, and it will play out again.”

Despite a 3.4% annualized contraction of Canada’s gross domestic product in the second quarter of 2009, the Canadian economy, too, appears to have turned the corner, the bank said.

The bank now expects Canada’s economy to expand by 2.5% in 2010, an increase over previous estimates. That should be followed by a 3.1% growth rate in 2011, the bank said.

Although the report expresses some concern about what a rising dollar might do to the recovery, the bank expects Canadian exports to be up by 25% in the July to September quarter of 2009, which would mark the first time in two years that exports contributed to Canada’s economic growth.

The bank’s 2.5% projection for Canada is also slightly ahead of the 2.4% increase it expects for the American economy. For 2011, the bank is predicting 3.3% growth for the U.S. economy.

IE