Developed economies to pick up steam in 2012: Reuters poll

Wed Mar 14, 2012 3:42pm EDT
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By Jonathan Cable

LONDON (Reuters) - Developed economies will pick up steam this year thanks to an array of ultra-loose monetary policies from major central banks and amid new signs of progress in the euro zone's debt crisis, Reuters polls found.

The surveys of over 250 economists, taken in the past few days, saw 2012 growth forecasts for the euro zone, Britain and Japan revised up, but left unchanged for the United States.

Greece, the source of the currency bloc's debt crisis, swapped its privately held bonds at the weekend for new, longer maturity paper with less than half the nominal value, cutting its debt by more than 100 billion euros ($131 billion).

That paved the way for euro zone ministers to give the final political go-ahead to a 130 billion euro package that aims to keep Athens financed until 2014, allaying fears the debt crisis would escalate further.

Central banks have slashed interest rates to record lows and pumped trillions of dollars into the money supply in a bid to stimulate growth, and a recent slew of upbeat data suggest their efforts have paid off.

The Organization for Economic Co-operation and Development (OECD) said this week economic conditions had improved in the euro zone and Britain while progress detected in previous months in the United States and Japan had continued.

A string of better-than-expected U.S. data, including three straight monthly gains of more than 200,000 in non-farm payrolls, has bolstered optimism about underlying strength in the world's biggest economy.

"I think it's evolving into a self-sustaining expansion," said Mark Zandi, chief economist at Moody's Analytics.   Continued...