Many are still racked with the highest unemployment levels in a generation, while others like Britain and Spain are still mired in a downturn. Signs have already surfaced around the world of fears of job losses threatening to undercut private consumption and as a result slow the pace of the global recovery.
Indeed, as investors take stock of the situation during the winter holiday, they will have much to think about. Global stock markets began surging in the second half of the year, but there are niggling worries that growth will be sluggish for a while still.
The coming year brings tremendous challenges, both for governments and the private sector. World leaders must weigh when to pull back from massive public spending measures that are eroding state budgets. Businesses will be relied on to pick up the pace as governments are forced to step back from their unprecedented aid, which amounted to about 2 per cent of their economic output in 2009.
The balancing act for governments is to wait long enough to allow a private sector recovery to fill the gap, but to pull out soon enough to avoid creating gaping holes in their public finances and fuelling renewed global market instability. The Group of 20 (G20), a bloc of leading wealthy and emerging countries, has been charged with monitoring government economic policies to ensure a sound recovery takes hold. The International Monetary Fund (IMF) will serve as the referee.
In its last report on the global economy, the IMF forecast just 1.3-per-cent growth in advanced economies in 2010, after their decline of 3.4 per cent over the course of this year. By contrast, emerging powers like China and India are carrying all the weight. Developing countries as a whole will surge ahead at a 5.1-per-cent growth rate in 2010, according to the IMF. China will grow a whopping 9 per cent and India more than 6 per cent.
"The consensus is that the emerging economies will take over an important expansionary role in the global economy," said Commerzbank's senior European economist Rainer Guntermann. "Emerging economies should grow stronger than industrialised countries (in the coming year) but there is a risk of setback in these nations," Guntermann said.
In particular, China faces the threat of overheating partly as a result of a rapid expansion in credit. While India's economic potential is considerable, Guntermann said that the nation faces substantial regional risks linked to Pakistan and Afghanistan.
The rise of the G20 this year into the premier forum for discussing economic policy - replacing the wealthy Group of Eight - was a clear sign that the economic prowess of countries like China, India and Brazil, had translated into growing political clout.
Those emerging nations returned the favour by contributing for the first time to the IMF, a global lender of last resort, after the G20 pledged to triple its resources to 750 billion dollars. But a greater and more difficult transition is needed: As US consumers begin saving more, the US has put others on notice that it can never again be the sole driver of the global economy.
Asian nations especially will have to find ways to boost domestic demand instead of relying on exports. "Rebalancing requires a fundamental reorientation of some of the world's major economies, a reorientation that will lead to major economic, social and political tensions," warns Jeffry Frieden, a professor of government at Harvard University.
Japan and Europe also face threats to their exports posed by the steady rise in their currencies. This in turn risks undercutting recovery for both the Japanese and European economies. While the euro has gained about 20 per cent against the dollar since the early months of 2009, the yen climbed to a 14-month high in November against the greenback.
Japan's economic uncertainties have been compounded by data showing deflation gaining momentum in October after core consumer prices fell 2.2 per cent from a year earlier.
Politicians in wealthy countries are also under renewed pressure to bring to an end the millions of job losses that are the recession's legacy. Indeed, the depth of the recession means the jobless rate in wealthy nations will remain high for much of 2010. The US unemployment rate hit 10.2 per cent in October for the first time in 26 years.
A surprising drop to 10 per cent in November gave economists some hope for the future, but most still fear the sluggish recovery will not make a significant dent in unemployment levels until 2011 at the earliest. In the meantime, the latest figures showed another 134,000 lost their jobs in the 16 nations sharing the euro during October leaving the unemployment rate at an 11-year high of 9.8 per cent.