Global Prolonged Economic Expansion Expected Says BNY Mellon's Chief Economist Richard Hoey
A sustained global economic expansion is expected, with a broad pattern of growth in both developed and emerging countries, according to BNY Mellon Chief Economist Richard Hoey as outlined in his most recent Economic Update.
"From a longer-term perspective, emerging countries have a higher trend growth rate than developed countries, due to continued diffusion of modern technologies and the long-term uptrend in the productivity of their labor force," said Hoey. "Cyclically, however, the countries with the best prospects for a near-term improvement in economic growth are the developed countries, as they recover from depressed levels of economic activity in response to easy monetary policy."
Hoey expects the pace of expansion in the U.S. to accelerate from approximately 2% in the last four years to 3% in 2014, 2015 and 2016.
"For U.S. economic growth, we expect a 'three for three' pattern," Hoey said. "The U.S. economy has been experiencing a fiscal drag from the tax hike on upper-income taxpayers, the Social Security tax hike, and the sequester spending cuts. This large fiscal tightening is now cresting. The U.S. faces a reduced fiscal drag in 2014 and beyond. We believe that the U.S. economy is near an inflection point to a somewhat faster growth rate. All the stimulative monetary policy of the past should continue to support expansion in the interest-sensitive sectors, including housing, autos and capital spending."
See http://www.bnymellon.com/foresight/update-video.html for Hoey's complete August 2013 Economic Update.
Notes to Editors:
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of June 30, 2013, BNY Mellon had $26.2 trillion in assets under custody and/or administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.
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