Global economic forecasts show that world annual economic growth is set to reach 4.5% during 2010, according to Angela McGowan, Northern Bank Chief Economist.
The findings of Northern Bank’s ‘Global Scenarios’ report shows that global recovery is on track, with most regions across the world showing improvements, particularly the US where demand has picked up sooner than expected, and Asia where growth continues to soar.
McGowan said: “The global recovery has remained on track this year, and has been even stronger than expected in most regions. Unfortunately, the good macro news has been overshadowed by the widespread contagion from the euro debt crisis in global markets. Without doubt the recent problems in Europe have the potential to take us into a ‘double-dip’ scenario, particularly if there are aggressive public spending cuts amongst G7 countries.
“However, our main forecasts don’t show the current euro debt crisis to lead to another global financial crisis, and in Northern Bank’s view this would not be enough to create a double dip.”
The report forecasts growth for the world’s largest economie,s including China, which is set to grow at 10.2%. The USA is expected to grow this year by 3.4%, Japan by 3.3%, and euroland is now forecast to grow by 1.3% in 2010.
Out of the four largest economies, euroland was the only region to have its growth forecast revised downwards — by 0.5% — since the last report.
Ms McGowan said: “The outlook in Europe is being shaped by the negative impact of the debt crisis on growth and public spending cuts, but this is being countered by a positive contribution from the weakening euro and the resulting improvement in competitiveness.”
Northern Bank forecasts have been revised to a slightly higher level for the US and Asia, with both being revised upwards by 0.2%.