With hindsight it is clear that the world economy came within a whisker of recession earlier this year.

Global shipping volumes contracted by 3.4pc between January and May, according to Holland’s CPB world trade index.

This episode is now behind us. Leading indicators and monetary data in the US, Europe and China point to an accelerating rebound over coming months.

Gabriel Stein, from Oxford Economics, says the growth rate of the world's real M3 money supply – based on the US, China, EMU, the UK, Japan and Canada – rose to a six-year high of 6.2pc in June.

The M3 gauge tends to lead economic growth by 12 months or so, suggesting that the worst may soon be over.

In Europe, the monetary kindling wood of recovery is clearly catching fire.Spain is growing at its fastest pace since the post-Lehman crisis. So is Ireland.

The triple effects of quantitative easing by the European Central Bank, a 12pc fall in the trade-weighted index of the euro in 15 months and the fall in Brent crude prices from $110 to $50, have together lifted Euroland out of its six-year depression.

The property slump is over. Standard & Poor’s expects house prices to rise 3pc in Holland, 4pc in Portugal, 5pc in Germany and 9pc in Ireland this year.

Simon Ward, from Henderson Global Investors, said a key gauge of the eurozone money supply – real six-month M1 – is growing a blistering rate of 12.6pc. This implies a surge in spending later this year. “Monetary policy is too loose in the eurozone. It is highly questionable whether they can really keep going with QE until the end of next year,” he said.

Simon Ward, from Henderson Global Investors, said a key gauge of the eurozone money supply – real six-month M1 – is growing a blistering rate of 12.6pc. This implies a surge in spending later this year. “Monetary policy is too loose in the eurozone. It is highly questionable whether they can really keep going with QE until the end of next year,” he said.

America is slowly weathering the effects of the strong dollar. The economy grew at a 2.3pc rate in the second quarter. Capital Economics expects it to accelerate to 3pc in the second half. Loans are growing at an 8pc rate. It is not a glorious boom, but nor is it the stuff of global meltdowns.

David Fuller's view

Here is a PDF of AE-P's Telegraph article.

I commend the rest of this article to subscribers.  AE-P is a highly experienced, world-class financial journalist, who has drawn on views from a number of credible sources. 

I was delighted to see this article because it has been published approximately 6.5 years after the worst credit crisis recession since the 1930s.  In other words, around the time when I would hope to see some evidence of global economic recovery, led by developed nations, following a deflationary credit crisis slump as I have been mentioning in Audios and Comment of the Day. 

However, the renewed slump in global commodity prices has understandably highlighted concerns for resources economies.  Nevertheless, falling prices for industrial commodities and also many agricultural products is a stimulus for consuming nations, as AE-P points out near the middle of his article.

Moreover, the accelerated rate of technological innovation, which this service frequently comments on, has lowered production costs for many commodities, not least crude oil.  This is positive deflation, albeit much better for importers rather than mainly exporters of commodities.

How might this affect stock markets? 

A gradual economic recovery, led by developed nations, will be mostly beneficial for stock markets.  It provides GDP growth which lifts corporate profits for many industries.  However, stock markets can easily run ahead of economic prospects, as we have often seen, including this year.  Therefore, we need to monitor share valuations generally, and trend momentum for the significant movers.   

The biggest danger for stock markets against a background of improving global economic conditions is overheating which leads to inflationary pressures, necessitating higher short-term interest rates from central bankers.  Fortunately, that is not a near-term prospect, even if the Fed does hike US rates by a quarter of a percent in September.

Meanwhile, we are still in the middle of this choppy, May through October period.  However, from November onwards, the US Presidential Election cycle will be a positive factor.