From eFinancial News:
Goldman Sachs has taken out its crystal ball to make its
economic forecasts for next year, ranging from the recovery of the US
housing market to stagnant growth in the European Union. Financial News
takes a look at the macro themes Goldman’s analysts think will dominate
markets in 2013.
1.Global growth: A ‘hump’ to get over, then a clear road ahead
The analysts predict weak growth in
early 2013 but, if that period is successfully navigated, we could see a
sustained recovery once the world economy gets over the risks to growth
in the first part of the year from fiscal restraint. Goldman predicts
global growth for 2013 of 3.3%, broadly in line with 2012. US gross
domestic product growth is seen stuttering at around 2%, there will be a
near-recession in the euro area and Chinese growth is seen falling
below the average of the last five to 10 years.
But the analysts say that below the
surface, there are significant differences from 2012. “Further healing
in the US housing and labour markets; a progressive relaxation of the
global energy supply constraint; and ‘room to grow’ particularly in the
developed world,” they said. If the 'hump' can be navigated, Goldman
envisages a "sustained sequential recovery in growth, which builds into
2014 and beyond."
2. Housing stabilisation and private-sector healing in the US
The US housing sector has picked up
this year and is set to continue – the analysts predicted that we will
see a 20% growth in housing starts and a 2-3% growth in home prices in
2013. They said: “[We will see] further modest US home price gains and
continued increase in housing activity.”
3. Stable China growth, but not like the old days
The pace of Chinese growth will
stabilise at a touch above 8%, the analysts predicted. Their risk
analysis of China suggested that key assets, such as Chinese equities,
had reflected large downgrades to China’s growth view. They said: “While
there has been a meaningful rebound in the market’s pricing of China
risk in the last three months, there may still be scope for stability
alone to provide relief.”...
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