Momentum to drain from world economy in 2012: poll

Thu Jan 19, 2012 12:29pm EST
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By Andy Bruce

LONDON (Reuters) - The world economy will lose momentum in 2012 but it will keep moving in the right direction, according to Reuters polls of around 600 economists who said crisis-hit Europe would drag on global growth.

Asian economies will again power the expansion of the world economy this year, but with relatively subdued performances. The

United States, meanwhile, should continue to contribute modest growth that will easily outpace its recession-hit European peers.

Brazil will be one of the few big economies that will pick up steam this year, outshining slower Latin American stablemates Mexico and Argentina.

A Reuters poll that covers all of the top 20 developed and emerging economies, as well as some others in Asia, suggests global economic growth will slow to around 3.3 percent this year from an estimated 3.7 percent in 2011.

That is more optimistic than the latest forecast from the World Bank, which predicted world GDP would rise only 2.5 percent this year.

Although the euro zone's sovereign debt crisis represents a huge risk to the world's economic health, there have at least been promising signs of life from the United States.

"We're fairly optimistic on the U.S., and we're in the soft-landing rather than the hard-landing camp for China," said Investec economist Victoria Cadman, whose forecast for global growth in the high-three percent range is slightly more optimistic than the consensus.   Continued...