A false economic dawn?

Cast your mind back three years to the heady days of autumn 2006. House prices were booming. Financial markets were bullish. The International Monetary Fund reported that global growth over a five-year period was at its strongest since the late 1960s.

In vain did the fund warn that there might be problems ahead – from over-exuberant banks, from high commodity prices and from the dangerous imbalance in the global economy between those countries that exported too much and those that exported too little.

So here's the question. What, apart from a stonking great recession, has actually changed? Oil prices are higher than they were in late 2006, the banking system remains unreformed (and pretty much unrepentant) and the global imbalances remain untackled.

Olivier Blanchard, the IMF's economic counsellor, has a slightly less gloomy analysis. Presenting the fund's latest snapshot of the global economy, he said that the recession in the US had led to consumers saving more and spending less. That has led to a sharp reduction in the US trade deficit, and meant that the rebalancing process was half complete.

It was now up to the IMF, armed with a mandate from the G20 summit in Pittsburgh, to ensure – as Blanchard put it – that the global economic community did not get stuck halfway across the river. The IMF is supposed to monitor the economic policies of the strategically important countries to see whether they are compatible with the goal of better-balanced growth.

In short, that means the US continues to save and export more, aided by a weaker dollar, while the Chinese have to consume more and export less, aided by a stronger renminbi.

Don't hold your breath. The fact that the G20 has called for rebalancing does not mean it is going to happen. The G20 also says it wants a successful end to the Doha round of trade talks but with zero impact.

For rebalancing to become a reality two things will have to happen. First, there will have to be a permanent rather than merely temporary change in the behaviour of US consumers. Sure, they are saving more at present, because unemployment is rising rapidly and house prices have fallen sharply over the past three years. But my hunch is that Americans will be straight back to the shopping malls once they get a whiff of the economy recovering.

Second, countries have to be prepared to take the policy measures that will be urged on them by the fund. In China's case that means a revaluation of the exchange rate and a big increase in government spending on health and education. All the evidence is Beijing will respond to the pressure at its own pace, which tends to be measured and slow.

So if not much has changed and the pace of reform is likely to be glacial, what are the odds on the current recovery – sustained temporarily by high levels of government spending – being a false dawn? Reasonably high. Certainly much higher than the financial markets believe.

Larry Elliott, the Guardian's economics editor.