Booming Asia will support global recovery, says poll of economists

THE world economy is set to rely even more heavily on booming emerging markets next year as recovery in rich nations from the worst financial crisis in generations plods on, according to a survey – but most nations will avoid a double dip recession.

The consensus from more than 500 economists polled by?Reuters across the Group of Seven industrialised nations and Asia found them less optimistic about recovery in the US, but forecasting robust growth in China and India next year.

Global GDP is expected to grow by a robust 4.6 per cent this year from a consensus of 4.2 per cent just three months ago, driven by emerging markets, but will then slow to 4.0 per cent in 2011, according to the poll.

Economists expect a languid rate of expansion in the biggest developed economies through to the middle of 2012, with annual growth in many cases struggling to top two per cent either this year or next.

While growth in each quarter is expected to quicken very modestly in the case of the United States, vast budget austerity measures in the euro zone and Britain are expected to cause sluggish recoveries, although these countries should avoid tipping back into recession.

Japan, struggling to break the stranglehold of a strong currency, will likely see its economic recovery stagnate completely in the fourth quarter of this year before recovering slowly in 2011. It is already mired in deflation.