US Growth: Up In 2010, Down In 2011

LONDON - A rollercoaster ride beckons for the US economy with growth showing signs of recovery next year before slumping again in 2011 - says Robin Bew, Editorial Director at the Economist Intelligence Unit.

In his monthly Global Forecast programme, Mr Bew explains why the EIU has revised upwards its forecast for US GDP in 2010, but then downwards again for 2011, making for a W-shaped recession.

He looks at the impact this movement could have on interest rates and what shape public sector involvement in economies is likely to take.

Looking at China, Mr Bew says why an “astonishingly effective” fiscal stimulus package means that that country can maintain and even improve current growth levels.

He also looks at the impact that swine flu is having on the global economy warning that while such events are unlikely to drag on for a very long time, there remain concerns about the inability of policymakers to respond effectively.

“The worry is that normally when you see something like this happening, governments try to offset it by doing something with policy. And the difficulty right now is in most countries around the world, they don’t really have any ammunition left. So if swine flu does drive a deteriorating economy, normally you’d expect to see government step up to the plate, but right now there’s probably not much they can do and that’s a bit of a concern.”

The interview and transcript are available now on w3.cantos.com/economist.

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Source: Economist Intelligence Unit

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