(Updates with the reaction of the stock market in the fourth paragraph).
December 9 (Bloomberg) – Pacific Investment Management Co., which manages the Fund more binding in the world, raised its forecast for next year's us growth as a "massive amount" stimulus of decision-makers in the economy, Director General Mohamed El-Erian said.Pimco pump sees economic growth of 3 to 3.5% in the fourth quarter of the year next to the same period of the year. Compared with its previous estimate for the growth of 2 to 2.5% and 2.2 percent gain forecasts for this year by the Fund currency international.Les United States uses monetary and fiscal policy to try to reach the speed of escape for the economy, "El-Erian said in a telephone interview today in his Office in Newport Beach, California." "What we don't know yet is whether this will be enough not just to change the trajectory of the economy for a year, but to place it on a sustainable path in the medium term".Stocks American scope of gains on the news that Pimco had raised its forecast for 2011 u.s. growth. Standard & Poor 500 index rose by 0.4% to 1,233.00, closing at its highest level since September 2008.pimco began using the term "new normal" there are more than two years to describe the state changes in the world economy after the worst recession since the great depression. In the new normal, the United States is regarded as being saddled with sluggish growth and high unemployment of years he has difficulty to overcome crisis.Policy MakersU.S benefits. policy makers respond to normal again pursuing strategies more "in most non-conventional" to aid economy, said El-Erian. The Federal Reserve for purchase $ 600 billion in 2011 for longer term US Treasury securities to help stimulate growth. President Barack Obama concluded an agreement with the Republican legislators on a budget package which includes a reduction of tax on wages 120 billion. "The new normal is still there, said El-Erian, 52. "What do decision makers is kicking the can, on the road in response to the new normal, symptoms but they are not even change the dynamics in the medium term".alors the economy American is recovering - it extended to 3.2% in the third quarter of the previous year — unemployment remained close to a maximum of 26 years old, from 9.8% in November from 9.6% in October.Europe StrugglingEurope, too, is faced with the impact of the new normal that the region was hit by a sovereign debt crisis. Pimco expects the economy of the euro area to grow by 0.5-0.75% next year, said El-Erian. Washington-based IMF predicted growth for the region of 1.9 per cent this year. "" Europe is a completely different way than United States, "says El-Erian. "He is trying to achieve sustainable growth in obtaining his economic house in order by budgetary austerity".the problem is that some countries - Greece, among them - perhaps not capable of transmitting sanitation of finances and economic growth, he said .Europe debt crisis prompted the Greece rescue and the Ireland this year, Europe's leaders are now discussing plans for a permanent financial net. The European Central Bank has redoubled to buy bonds more indebted region countries to avoid spreading.The ECB market rout is essentially "support for a question of solvency liquidity", El-Erian said. "The question is whether the market will cooperate with that", he added. "If it isn't, you get disordered in peripheral countries restructuring and economic contraction more."United States, policy makers must follow their momentum stimulus-induced growth with measures to bring down the deficit in the medium term and to improve competitiveness in the long term, he said.-Editors: Christopher Wellisz, Kevin Costelloe
To contact the reporter on this story: Rich Miller in Washington, D.c. rmiller28@bloomberg.net
To contact editors responsible for this story: Christopher Wellisz cwellisz@bloomberg.net
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