Better Growth in Year's Second Half
Jan 16, 2013
SUPER: Ethan Harris
I think we start of the year on a very slow note, with both the US fiscal cliff and the on-going recession in Europe. But we hope that by the second half of the year, Europe starts to settle down, the fiscal cliff is resolved. And so we’re expecting better growth in the second half.
The fiscal cliff is a very important concern. It creates uncertainty, causing businesses to hold back, there will be some fiscal austerity, so it really does mean very soft growth for the US at the start of the year.
Europe has been the big story of the last several years and we think it remains an important story. On-going issues around funding of the periphery should cause moments of market concern, it’s an on-going source of restraint on global trade. We do expect the European crisis to ease back a bit in the second half of the year, but it does remain an important constraint on global growth.