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RBA governer, Glen Stevens,  has warned “the two-speed nature of the global recovery” is a major threat to an otherwise positive outlook for 2010.

In his opening statement to the House of Representatives Standing Committee on Economics, Stevens said it appeared that world GDP grew at an annualised pace of about 4% in the second half of last year.

The expectation that a similar GDP result would occur in 2010 plus the continued thawing of international financial markets were welcome developments, he said, but “the situation is not without some challenges. I will mention just two”.

“The first is the two-speed nature of the global recovery,” Stevens said. By this he referred to the strong upturn in the Asia-Pacific economies (driven by “secularly rising incomes, generally healthy banking systems and relatively low public debt levels”) versus the more tentative rebound in the large industrial countries (driven by “the turn in the inventory cycle and temporary policy measures”).

In the latter, Stevens said growth was expected to remain modest and, as a result, these economies are likely to be characterised by a lot of spare capacity and ongoing high unemployment.

The second challenge, he said was the “increasing focus on sovereign creditworthiness“.

“We saw a brief period of turmoil regarding Dubai late last year, and more recently the public finances of Greece have been under the spotlight, with some other European countries just in the background.

“Going beyond just these instances, government balance sheets in numerous countries have taken on considerable burdens as a result of the crisis, and markets are beginning to focus on issues of sustainability. It will be a very delicate balancing act for those governments to strengthen their fiscal positions without undermining the upturn in their economies,” he said.

Stevens though was happy to report that in both these areas, Australia was relatively well-placed. “We are located in the part of the world that is seeing the most growth. And in terms of fiscal sustainability, Australia’s position is, by any measure, very strong indeed,” he added.