The world economy will grow by 2 percent in 2010, marking its first gain in two years, according to a Cabinet Office report released Tuesday, citing growing signs of recovery in China and elsewhere in Asia.
In China, large-scale economic stimulus measures will continue, enabling smooth growth led by domestic demand, the report says.
But the Cabinet Office warned that a real estate bubble may be inflating in some Chinese cities, including Shanghai.
The United States is forecast to post inflation-adjusted growth in gross domestic product of 1 percent in 2010, the report says, citing public works projects as a driving force.
But the Cabinet Office described the expected U.S. recovery as "without employment." It said the labor market in the United States will worsen further in the coming year, with the unemployment rate nearing its postwar peak of 10.8 percent.
The U.S. jobless rate shot up to 10.2 percent in October, the highest in more than 26 years.
The report says real GDP in the euro zone will gain less than 1 percent in 2010.