CEBR now predicts a 3.4 per cent rise in global GDP next year, down from the 4.1 per cent growth projected in July. Annual growth will remain below four per cent until 2015, said CEBR’s quarterly research paper.
“I would be prepared to bet one of my better shirts on there being no global double-dip,” said CEBR chief executive Douglas McWilliams. “Although their growth will be affected by slower growth in the West, the emerging economies are too resilient for global growth to go negative again in the short term.”
The slowdown in US recovery is mainly due to the end of a bounce after destocking, said CEBR, which also pointed to firms’ reluctance to hire or invest as a drag on the rate of growth.
The IMF echoed this sentiment last week, when it said at a conference that the world’s richest countries need to stimulate job growth to avoid a crisis of confidence.
The US Federal Reserve’s research earlier this month also showed a “widespread slowing” in the country’s economic improvement.
The Fed’s Beige Book survey of businesses found that seven out of 12 regions were experiencing modest growth, compared to ten regions during May and June.
“In the longer term, whether we can have reasonably decent growth in the West as well as in the East will depend on whether enough is invested to ensure reasonable supplies of energy, minerals and food,” said McWilliams.
“We need immediately to reform a Common Agricultural Policy... to cope with a world of food shortages.”