US forecast to drive recovery

GLOBAL growth should accelerate next year as the powerhouse United States economy begins firing on all cylinders, a key report today predicts.

US growth to lead global economic resurgence, according to a new report. Picture: Reuters

America’s expansion is expected to lead a recovery in advanced nations and counter any hesitation in major emerging economies such as China and India.

The forecasts are contained in the latest bulletin from the Centre for Economics & Business Research (CEBR), one of the most widely followed economic consultancies. Its report gives a series of country-by-country forecasts as well as projections for the Eurozone and global economies.

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It estimates worldwide growth of 2.5 per cent in 2013, rising to 3.1 per cent next year.

In comments echoing those of the Organisation for Economic Co-operation & Development, the CEBR said the drivers of global growth are set to shift over the next four years. Advanced economies are predicted to account for 28 per cent of output expansion, up from about 21 per cent this year, while the share of growth attributed to emerging nations is set to fall from 50 per cent to as low as 44 per cent.

Katie Evans, the main author of the report, said: “After several years in which advanced economics have acted as a drag on world growth, we now see the tables turning.

“While emerging markets have been buoyed by cheap ­liquidity from quantitative easing in recent years, it is ­becoming increasingly clear that significant domestic reforms must be implemented for these countries to regain their pre-crisis growth trajectories.”

The CEBR predicts UK economic growth of 1.2 per cent this year, rising to 1.7 per cent in 2014.