Global economy to experience continued, slower recovery in 2011: economists

17:42, January 26, 2011      

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The economies around the world are likely to experience a continued, but slower recovery in 2011, said leading experts at the ninth annual Dow Jones Indexes Global Economic Outlook.

"We are expecting a very 'growth friendly' policy environment -- monetary, fiscal and regulatory. (The world economy) is likely to sustain a moderate 3 percent growth over the next two years," said Ethan S. Harris, head of developed economics research, BofA Merrill Lynch.

"However, the economy is still struggling with the after-effects of the economic crisis. Weakness in housing, state and local government finances and household balance sheets will continue to constrain the recovery, preventing the normal 6-7 percent 'boom' that follows a major recession."

"Having ground out a double-digit return in 2010, we expect global equities to do the same in 2011," said Robert Buckland, chief global equity strategist, Citi Investment Research &Analysis.

"We remain constructive on equity markets and see prospects for further gains from here. To the disappointment of policy makers, we don't think companies in the developed world will use the cheap debt to spend on new investment."

"If Japan is our favored regional recovery story, emerging markets remain our preferred structural growth play. Talk of a deflating Emerging Market equity bubble is premature, in our view," he added.

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