The United States' and global economies are in recession and it is likely to last at least through mid-2002, according to a US-based economist.
Kurt Karl, chief US economist at the Swiss Re, one the world's leading reinsures, said that there are no signs of the recession bottoming and so forecasting an upturn was very difficult.
He was among Swiss Re economists, investment professionals and industry experts who on Tuesday unveiled their 2002 forecasts at panel in New York.
According to Karl's forecast, the US real GDP growth will decline to a negative 0.5 percent in February 2002, from 1 percent in February of 2001, but will climb to 3.8 percent in February 2003. The US growth rate in 2000 was 4.1 percent.
Other regions will follow a similar growth pattern with different rates, according to Karl's forecast.
Europe's real GDP growth will drop to 0.7 percent in February 2002, from 3.5 percent in 2000 and 1.4 percent in February of 2001,and will climb to 2.3 percent in February 2003.
In February 2002, developing Asia's real GDP growth is expected to reach 4.3 percent, up from 3.3 percent in February 2001, but down from 6.7 percent in 2000. These countries will climb to 5.4 percent in February 2003.
Japan, which grew 0.8 percent in 2000, will drop to a negative 0.6 percent in February this year and further a negative 0.7 a year later, and climb to 1.2 percent in February 2003.
Karl said that upside and downside risks were evenly balanced with this forecast. He also predicted that US interest rates would continue to decline, but would rise next year as the recovery took hold. Monetary policy easing will have a big impact next year in the United States as recently enacted tax cuts and increased government spending will spur both the recovery and consumer confidence. Falling oil prices, mortgage financing and falling inflation will help US consumers.
(Xinhua News Agency December 5, 2001)
