Those are insights from a recent interview with Stephane Garelli, director of the World Competitiveness Center at IMD, a Swiss business school that ranks nations according to their competitive strength.

Garelli’s outlook matches that of the International Monetary Fund, which expects the global economy to expand 2.5% in 2010, a full 0.6% faster than it had forecast in early 2009. The IMF predicts that in the United States, economic growth will edge up to 0.8% in 2010, following a 2.6% plunge in 2009. That, too, is an improvement from early 2009, when the IMF predicted the U.S. economy would remain flat in 2010. The 2009 IMD World Competitiveness Yearbook ranks the United States No. 1 among 57 nations in terms of international competitiveness.

First in, first out. Because the United States was among the first nations to enter the global recession, it should be among the first to lead the way out, Garelli said. While some smaller exporting nations—and possibly China—are expected to see the earliest real growth in 2010, recovery in the United States will provide the clearest message that the world economy is on the upswing, he said. Among the last to recover will likely be Japan, Germany, and Switzerland, because of their lack of economic flexibility.

Depression avoided. The risk of a worldwide economic depression has passed, Garelli said (a depression is defined as a 10% drop in gross domestic product or a recession lasting three years). “However, Iceland and the Baltic States may be exceptions,” he added. Deflation is also not likely to hit many countries, although Britain, Japan, and Spain could suffer its effects, along with the automobile industry and a few industrial sectors.

Stimulating results. Garelli said the stimulus packages from national governments will work best in emerging economies, because people there need consumer goods and are likely to spend the money. In developed countries, “people will save the money they receive,” Garelli said. “They can delay a purchase without a perceptible decline in their standard of living.”

Jobless threat. Rising unemployment will remain a major barrier to economic recovery, because it has a devastating impact on public finances, Garelli said. As jobless rates surge, more government funds will be allocated to support the unemployed rather than create new jobs.

Tax havens hit. A side effect of stimulus legislation will be new attacks on tax havens, Garelli pointed out. In order to pay for stimulus spending, many countries plan to raise taxes on the wealthy. One way to do that would be to close tax loopholes.

Inflation looms. Global economic recovery will almost certainly bring a new round of global inflation. “It will be triggered by both an excess of money supply (especially dollars) and a rapid rise in commodity prices (fueled by the demand of emerging nations),” said Garelli. “Central banks will not react immediately to rising inflation so as not to impede recovery—and because inflation is an effective way to reduce the value of debt.”

Spending spree. Recovery also will trigger a rush by companies to spend billions in cash that has been set aside during the recession, Garelli predicted. The world’s largest 100 companies have cash reserves estimated at a total of $600 billion. “This money will be used to buy back shares,” Garelli said. “Acquiring industrial assets and companies will also be a priority.”

Winners take all. In the end, national governments will emerge as clear winners. “They have the ultimate power: printing money, making laws, and setting taxes,” Garelli said. “The multilateral world is on the decline, and it is again a brutal power game among big nations. But beware: In the words of Thomas Jefferson, ‘A government big enough to give you everything you want, is also strong enough to take everything you have.’”