Europe’s periphery to continue suffering, suggests BNY Mellon’s Hoey
BNY Mellon chief economist Richard Hoey believes that a full scale financial meltdown will be avoided in Europe, but that economic activity will remain depressed in the periphery for several years yet.
“The US, UK, Japan and many other countries borrow in their own currencies, for which they control supply. However, each country in the eurozone has been borrowing in a foreign currency that it cannot create, the euro.
“In 2012, we continue to expect worldwide economic growth of about 3%, somewhat slower than the IMF’s April 2012 forecast of 3.5%.
“We expect a global growth recession, with an economic decline in Southern Europe, slight declines or slight growth for several quarters in the UK and much of Northern Europe, near-trend growth in the US and sustained but slower growth in China and other emerging market countries.”
Hoey’s full forecast for the global economy can be viewed in the video below: