TORONTO -- The economy has turned a corner and is recovering, according to the Canadian Chamber.

There are a number of reasons for the improving conditions, which include the stabilization of global trade, the rebound of share prices, an upward trend in commodity prices and a worldwide improvement in business and consumer confidence.

"While important progress has been made, the outlook for global growth remains subject to considerable uncertainty," said Perrin Beatty, president of the organization formerly known as the Canadian Chamber of Commerce.

"Premature withdrawal of stimulus measures would stall recovery, endanger confidence, and put jobs at risk," he said.

While some market economies have returned to high growth rates, the rate of recovery in the U.S. and other advanced economies will remain subdued. This will effect Canadian exports in 2010, but there is room for an increase in domestic demand, he said.

The Canadian economy is projected to grow at an average annual rate of 2.6% in 2010, which is modest compared to previous economic cycles.

Unemployment figures are expected to peak in early 2010 at about 8.8%.

"Hiring intentions have improved, but employers remain guarded. As a result, the unemployment rate is expected to remain well above pre-recession levels, and gains in real personal disposable income are likely to be modest," Beatty said.

The high value of the dollar and high levels of unemployment will continue to subdue inflation pressures, he said.

KEVIN.CONNOR@SUNMEDIA.CA