Global Economy to Grow 3 Percent

Global Economy to Grow 3 Percent

The global economy is expected to grow 3 percent this year, with emerging nations expanding more rapidly than the United States and Europe, the Paris-based trade credit insurer Coface said in a report.

“Emerging countries have nearly recovered their pre-crisis growth level, the United States shows a respectable but risky recovery and the ending of the crisis is very painstaking in Europe,” said Francois David, president of Coface.

Coface said three industrialized countries – Canada, Australia and New Zealand – have returned to their pre-crisis rank of A1, the highest level in Coface’s rankings, and that the United States’ A2 rating has been placed under “positive watch.”

The optimism about the U.S. economy is tempered by concern about a slowdown later this year as the effects of the budget stimulus wear off. Coface gave the U.S. an A1 rating before the recession.

U.S. economic growth this year is forecast at 2.3 percent, Coface said. That’s below the 5.7 percent forecast for emerging countries but well ahead of the 0.8 percent forecast for Eurozone nations.

Coface said European economies are generally sluggish and fall into three categories. The healthiest are traditional exporters like Germany and the Netherlands although they will be affected by weak demand from continental trading partners. Growth in France and Italy, driven more by household consumption, will be only “slightly positive” because of a deteriorating labor market. And hard-hit economies in Greece and Spain will continue to contract, Coface predicted.

Contact Joseph Bonney at jbonney@joc.com.