The global economy will rebound faster than expected, says Jim O’Neill, head of global economic research at Goldman Sachs
"I think what we've seen since the turn of the year . . . is actually really strong," O'Neill told CNBC, referring to recent economic data.
“We’re looking at world growth stronger than we’re forecasting at the moment, which is certainly still very much stronger than the consensus.”
Goldman currently forecasts world growth of 4.4 percent this year.
Recent economic statistics from China, India and South Korea are “on fire,” O’Neill said.
He also noted that the Institute for Supply Management's index of U.S. manufacturing rose to 55.9 in December, the highest level in 3 ½ years.
Western economies will benefit from continued fiscal and monetary policy stimulus, O’Neill says.
“Policymakers, at least in the west, are still saying we’re not doing anything guys, so go ahead and party.”
Emerging markets are trickier, he says. China for example has signaled it may tighten policy.
But fears of a bubble in China are “completely overblown,” O’Neill says.
He believes China’s bank lending will slow this year.
Backing up O’Neill’s global bullishness, the JP Morgan Chase Global Total Output Index, rose to 53.4 in December from 51.7 in November.
"The latest data suggest a positive end to a tumultuous year for the global economy, as the second half of 2009 saw a marked shift into recovery territory," JP Morgan director David Hensley told Reuters.
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