The world's top economies will post moderate growth this year, capped by high oil prices, with the United States putting in the best performance, a Reuters poll of around 150 economists shows. The quarterly survey on the outlook for the Group of Seven industrialised nations showed that economists have cut their growth forecasts for the eurozone and Canada since January, but are now slightly more optimistic about Japan and the United States.
US gross domestic product (GDP), adjusted by Reuters for international comparisons, was seen expanding at 3.8 percent this year, up from the 3.6 percent forecast in the January survey.
"We are still seeing broad growth, not just with the consumer and with housing, but also the business sector, which is contributing quite a bit more to the economy. And that is making the economy pretty resilient," said Gary Thayer, chief economist at AG Edwards in St. Louis.
The mid-range forecasts in the survey are recalculated where necessary to give straight percentage changes between full calendar years. The original, annualised, forecast for US GDP growth was 3.6 percent this year and 3.4 percent in 2006.
Economists said that higher oil prices could have some negative effects on growth in the United States and elsewhere. If oil prices stay at $50 or above for the rest of the year, the survey showed them shaving on average 0.25 percentage points off annual growth in Europe and US
But the poll showed the US crude oil price averaging $50 this year and Brent crude at $45 - both below current levels.
Weaker than expected growth in the final quarter of 2004, along with high oil prices at the start of this year, prompted economists to lower their forecasts for the 12-nation eurozone.
The median showed eurozone GDP growing 1.5 percent in 2005 - down from 1.8 percent growth predicted in the January poll.
"In the near-term, the eurozone outlook is not good at all," said Rob Carnell at ING Financial Markets. "It will be another quarter or two before we start to see things turn around."
Forecasts for Germany and Italy were slashed to under one percent. By contrast, economists were more optimistic about France than three months ago, expecting the eurozone's second biggest economy to grow two percent this year.
Britain's GDP was forecast to grow 2.6 percent this year, unchanged from the view in the last poll, and down from 3.1 percent in 2004.
The Bank of England has raised interest rates five times since November 2003 and economists said this would take its toll on consumer spending and lead to slower growth. "The outlook for the consumer is the principal factor driving our forecasts for slower growth (in the UK)," said Michael Hume at Lehman Brothers
In Japan, by contrast, growth was seen improving, albeit very slowly, after shrinking for two straight quarters in 2004.
In the current calendar year it was seen growing 1.0 percent, with deflation coming to an end in early 2006.
In Canada, growth prospects have been dampened by the strength of its currency. The Canadian dollar climbed some 30 percent against its US equivalent in 2003 and 2004 and had recently been trading in the 80-83 US cents band.
Estimates for growth in the smallest G7 economy, recalculated by Reuters for international comparisons from original annualised forecasts, were 2.7 percent for this year, down from 2.9 percent three months ago.
But growth was seen picking up to 3.0 percent year-on-year in 2006.
The euro zone and Japan were also forecast to do better in 2006, whilst the British and US economies were seen slowing fractionally.
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