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5-Year Global Economic Forecast

While the development of emerging economies seems well anchored, n advanced economies, projected rates of growth are not sufficient to avoid mounting debt and deficit problems.

What’s the Latest Development?

At PIMCO’s annual Secular Forum, outside speakers talk about what is likely to happen in the global economy in the next 3-5 years. Here are some of their conclusions from this year: “Advanced economies will face sluggish (call it 2%) growth and persistently high, increasingly structural (and therefore protracted) unemployment. … Emerging economies will achieve higher growth (in the 6% range), and their income and wealth levels will continue to converge with those of advanced economies. … Sovereign creditworthiness will continue to diverge, with a further deterioration in advanced countries and continued improvement in emerging markets.”

What’s the Big Idea?

“The global economy overall will hobble along, continuing its gradual transition from a uni-polar to a multi-polar world.” That is the most general conclusion to come from PIMCO’s annual economic forum. “As much as we may wish for a more reassuring outlook, the world economy will remain unusually fluid in the coming years. What appears as a systemically interconnected world will also turn out to be increasingly fragmented cognitively, with weak global governance and policy coordination. This is a global economy that must be navigated carefully, lest those that seek to benefit from change find themselves falling victim to it.”


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