Finally, charting the recovery's course

By Emily Kaiser

WASHINGTON (Reuters) - If the majority of Wall Street economists are right, the U.S. recession will end this quarter and the global recovery won't be far behind.

On Wednesday, the International Monetary Fund is expected to nudge up its forecast for 2010 global growth from the current estimate of 1.9 percent, primarily because fears of a more serious economic setback have not materialized.

That makes for a brighter backdrop to this week's meeting of leaders from the Group of Eight major industrial nations in Italy, where the economic outlook is top of the agenda.

IMF officials are expected to urge the G8 to start planning now for how to go about undoing the special lending programs and stimulus packages worth trillions of dollars that were put in place to prevent the recession from becoming a depression.

Recovery will not be a smooth process, and there are plenty of reasons to be cautious about the strength of the rebound. As Banc of America Securities-Merrill Lynch economist Drew Matus put it, this quarter marks a "new beginning with some nagging reminders of the past."

First, the good news.

The U.S. housing slump appears to be near an end after 3-1/2 years of decline. That, combined with a strong stock market performance in the second quarter, should stop the hemorrhaging in household wealth after more than $12 trillion in losses since the recession started in December 2007.