Domestic-demand driven economies such as China, India and Indonesia are likely to be at the forefront of the 2010 recovery, according to Standard Chartered Bank’s monthly Global Focus report.
Next year’s predicted recovery will be thanks to a “synchronised, sizable, and successful global policy stimulus” says the report. It further expects that that the rise of the Asian economies will reinforce the shift in the balance of economic and financial power from the west to the east.
“The outlook will depend on the interaction between economic fundamentals, policy and confidence,” says Gerard Lyons, chief economist and group head of global research. “Economies with stronger fundamentals, like China and India, may see stronger rebounds as we move through the year.”
The Global Focus report provides detailed outlook and forecasts for the world’s major economies and key emerging markets and regions, including Asia, Africa and the Middle East. Among the key predictions are: global growth is likely to be 2.7% in 2010, compared with an estimated 1.9% contraction in 2009; Asia is likely to grow by 7% in 2010, compared with an estimated 4.5% growth in 2009 while China and India are expected to grow by 10 and 7.5%, respectively, compared with 8.5 and 6.8% in 2009. The report also provides detailed analyses and forecasts for foreign exchange, rates, credit and commodity markets.
Although Standard Chartered is not predicting a “double-dip” recession in the west, it suggests that a number of economies in this part of the world could witness a negative quarter of growth at some stage next year.
“Our forecasts suggest that the recovery will take the shape of an L or a U in the West and a V in the East,” says Lyons.
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