Hoping, as usual, that next year will be better
By Alan Wheatley
LONDON (Reuters) - Like winemakers consoling themselves after a poor vintage, economists are putting a disappointing 12 months behind them and hoping that 2014 will be a better year for global growth.
A lively debate over whether developed economies face a 'permanent slump' has sprung up since former U.S. Treasury Secretary Larry Summers argued recently that deeply negative inflation-adjusted interest rates may be needed in a world facing 'secular stagnation'.
But someone forgot to pass on the gloomy prognosis to the research departments of big banks, which are busy bombarding clients with their investment outlooks for the year ahead.
With fiscal drag fading, monetary policy ultra-loose and credit conditions gradually easing, many of them reckon rich countries will outpace emerging economies in 2014.
Credit Suisse expects global growth to improve to 3.7 percent from 2.9 percent this year, which is down on the 2012 rate of 3.1 percent.
"We think that pick-up will be more concentrated in developed market economies, especially Europe and also somewhat in the U.S.," said Neil Soss, the Swiss bank's chief economist in New York.
He expects rich countries to almost double their growth rate to 2.1 percent. Emerging market growth should quicken to 5.3 percent from 4.7 percent, but the growth gap between the two will be the narrowest since 2002, Credit Suisse believes.
FORECASTING AS A PACK Continued...