Citigroup Inc. upgraded its 2010 economic growth forecasts for several countries on Monday (23 November 2009), and said it expects a sustained but uneven global recovery next year.The annual report, released by Citi's global research unit, said almost all major economies exited recession in the second and third fiscal quarters.
Central banks are unlikely to hike key interest rates through next year, and the threat of global inflation appears contained, according to the report.
Citi said a recovery looks to be even across major economies in the beginning of the year, while Asia - excluding Japan - will see sustained momentum.
While the U.S. will see fairly strong economic growth, Europe and Japan will experience a more gradual recovery.
Citi lifted its 2010 growth domestic product outlook for the U.S., Japan, Britain, Australia, New Zealand, Hong Kong, Korea, Argentina, Hungary, Poland, Czech Republic and Turkey.
However, it said credit availability will likely be limited for at least another year or two as banks seek to raise extra capital.
Michael Saunders, Citi's global head of developed markets economics, warned that countries will need to adjust some fiscal policies.
"Global economies need central banks and governments to successfully manage the exit strategies from extreme monetary accommodation, without creating further instabilities and denting future growth prospects," he said.
Saunders expects the rankings of global economies to change drastically in the next 15 years as resource-rich regions like the Middle East, Africa, Latin America, Russia and Brazil see growth.
Meanwhile, as emerging markets industrialize, consumer spending there is expected to fill the gap left by moderate spending in the U.S. and other industrial countries.
This is a broad stroke of the brush. Hope it is indicative of some sustained growth.
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