views

WILL WE SEE A RETURN TO GROWTH LATER THIS YEAR?

<strong>MICHAEL SAUNDERS CITIGROUP<br /><br /></strong>We expect that the second quarter will indeed turn out to be the last quarter of recession &ndash; ie, falling GDP. But we expect a slow recovery, held back by high private debts and poor credit availability. We expect it will take about 20 quarters before GDP regains its pre-recession peak.<br /><strong><br />VICKY REDWOOD CAPITAL ECONOMICS<br /></strong>While the monthly CIPS/Markit surveys are on an upward trend and look like they will be consistent with positive GDP growth in the third quarter, these surveys have been far more upbeat than the official data so far this year and so we would not rely on them much.<br /><strong><br />PHILIP SHAW INVESTEC<br /></strong>It still seems more likely that the economy will expand in both the third and fourth quarters and continue its modest recovery through 2010. Nonetheless our GDP forecast for this year is now at a very scary 4.5 per cent contraction, which we have downgraded from 4.0 per cent.