Salient to Investors:
Saumil Parikh at Pimco said:
- Global growth will increase to 2.25 percent to 2.75 percent through September of 2014 as US and European policy won’t hamper growth as much as in the past, private sector confidence strengthens as global wealth increases, and central banks use monetary policy to curb risks.
- Expansion for the coming four quarters could be hindered by a reduction of household debt relative to income, and by the increase in interest rates in Q2, 2013 causing tighter financial conditions for world’s most rate-sensitive components.
- A successful handoff to self-sustaining growth will depend on an increase in household income and spending as the effects of fiscal and monetary policy wane.
- The US will expand by 2 percent to 2.5 percent in the coming 12 months as weak household income growth stemming from the low-quality nature of new jobs tempers gains.
- The euro area will grow 0 percent to 0.5 percent as fiscal and monetary policy remains tight.
- China will grow 6.75 percent to 7.25 percent.
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