Canada's leader in asset servicing

Knowledge Leadership Asset Servicing Centre Retiree Centre Transfer Agency Services

 

 

 

May 2010

Economic update

We expect a sustained global expansion at a real GDP growth rate of 4 per cent to 4.5 per cent for both 2010 and 2011, with financially strong countries leading and “debt hangover” countries growing more tentatively. We continue to expect the U.S. economy to grow at about a 3 per cent to 4 per cent pace in 2010 and 2011. The financial crisis and recession generated a downside synchronization of the world’s economies and now the resulting policy stimulus has generated an upside synchronization of the world’s economies. The dramatic upward shift in the economic consensus over the last year is illustrated by the rise in IMF forecasts in its World Economic Outlook between the April 2009 issue and the April 2010 issue, with the estimates for real GDP growth in 2010 rising from 1.9 per cent to 4.2 percent for the world economy, rising from 4.0 per cent to 6.3 per cent for the emerging and developing economies and rising from zero to 3.1 per cent for the U.S. economy.

The strongest economies in 2010 and 2011 should be those with three characteristics: (1) public policy which places the highest priority on economic growth relative to other objectives, (2) no significant debt overhang and (3) rising productivity of the workforce due to the diffusion of modern technology and business practices. This would include some of the largest emerging market countries.

By Richard B. Hoey, chief economist, BNY Mellon
April 28, 2010

This report represents the general economic overviews of Mr. Richard Hoey, chief economist, BNY Mellon, and does not constitute investment advice, nor should it be considered predictive of any future market performance.

*Reprinted with permission from BNY Mellon

 

*  *  *

 

Trade Talk® is provided for general information purposes only and CIBC Mellon Global Securities Services Company, CIBC Mellon Trust Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use.

Privacy statement / Legal matters