The world's developed nations may now be creeping out of the worst recession in decades but the outlook remains brittle and interest rates will remain steady well into next year, Reuters polls of over 250 economists show. Investors and traders have been mostly exuberant since early March after digging a multi-year pit for world stock markets, lifting some major share indexes by 50 percent on hopes that the worst is over and that growth will soon return.
That has stirred plenty of speculation about eventual exit strategies from record-low interest rates and unusual measures policymakers have drawn up to get the developed world out of its worst economic funk since the Second World War. The August Reuters poll saw one of the largest upgrades to the near-term outlook seen so far this year in the US.
But many forecasters, perhaps chastened by how they collectively misjudged the severity of contraction late last year and in the early months of 2009, remain remarkably subdued about next year. "Reports of the death of the global economy were greatly exaggerated, but we should not already be looking for a clean bill of health," said Marco Annunziata, chief economist at UniCredit. "Recent data justify relief, not euphoria."
Many are warning not to draw too many hard conclusions over unexpected news that the euro area's two largest economies, Germany and France, grew in the second quarter, as did the world's second largest economy, Japan. Bundesbank chief Axel Weber sounded the same tone in an interview this week, warning the German recovery may not be sustainable yet. And Bank of Japan board member Atsushi Mizuno said on Thursday that global economic conditions were fragile.
Comments
Comments are closed.