Tags: Citi | citigroup | Global | Growth | Forecasts

CNBC: Citi Again Slashes Global Growth Forecasts

By    |   Thursday, 29 Sep 2011 12:54 PM

Citigroup has cut its global gross domestic product forecasts as growth prospects “continue to deteriorate quickly,” CNBC reported. This latest downgrade by Citigroup is one of a series of such cuts.

Last month, Reuters reported that Citigroup cut its global GDP growth view for 2011 to 3.1 percent from 3.4 percent, and for 2012, to 3.2 percent from 3.7 percent.

However, CNBC reported Citigroup downgraded its global forecast again on Sept. 6. Now, the financial news provider is reporting that Citigroup has unveiled numbers that are even grimmer.

At a global level, the bank's Citi Investment Research & Analysis unit predicted on Thursday that growth will slow to 3 percent this year and 2.9 percent in 2012, CNBC reported. Two percent global growth is seen by the International Monetary Fund and World Bank as the classification for global recession.

Bloomberg says the world economy grew 5.1 percent last year, according to the International Monetary Fund.

In August, despite the downgrade, Reuters noted that Citigroup did not currently expect recessions in the major economies as the slowdown in economic growth was not seen as strong enough to reverse global profits.

However, investors do not appear to agree at this point.

Bloomberg said its quarterly Global Poll shows that international investors expect the world economy to relapse into a recession, with more than one in three forecasting a global economic meltdown within the next year.

Investors are already responding by husbanding resources, added Bloomberg.

Citi Chief Economist Willem Buiter says what it means it that the European Central Bank is likely to cut rates, while the U.S. Federal Reserve will probably need to see significant downside risks before doing anything more than changing its language to guide interest rate expectations lower, reported CNBC.

Citi equity strategy team is cautious on risk assets and bullish on core fixed income, while the Citi foreign exchange team likes the dollar and yen, said Buiter.

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Citigroup has cut its global gross domestic product forecasts as growth prospects continue to deteriorate quickly, CNBC reported. This latest downgrade by Citigroup is one of a series of such cuts. Last month, Reuters reported that Citigroup cut its global GDP growth...
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Thursday, 29 Sep 2011 12:54 PM
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