Global Prolonged Economic Expansion Expected Says BNY Mellon's Chief Economist Richard Hoey

NEW YORK and LONDON, Aug. 9, 2013 /PRNewswire/ -- A sustained  global economic expansion is expected, with a broad pattern of growth in both developed and emerging countries, according to BNY Mellon Chief Economist Richard Hoey as outlined in his most recent Economic Update. 

"From a longer-term perspective, emerging countries have a higher trend growth rate than developed countries, due to continued diffusion of modern technologies and the long-term uptrend in the productivity of their labor force," said Hoey.  "Cyclically, however, the countries with the best prospects for a near-term improvement in economic growth are the developed countries, as they recover from depressed levels of economic activity in response to easy monetary policy."

Hoey expects the pace of expansion in the U.S. to accelerate from approximately 2% in the last four years to 3% in 2014, 2015 and 2016.

"For U.S. economic growth, we expect a 'three for three' pattern," Hoey said.  "The U.S. economy has been experiencing a fiscal drag from the tax hike on upper-income taxpayers, the Social Security tax hike, and the sequester spending cuts.  This large fiscal tightening is now cresting.  The U.S. faces a reduced fiscal drag in 2014 and beyond.  We believe that the U.S. economy is near an inflection point to a somewhat faster growth rate.  All the stimulative monetary policy of the past should continue to support expansion in the interest-sensitive sectors, including housing, autos and capital spending." 

See http://www.bnymellon.com/foresight/update-video.html for Hoey's complete August 2013 Economic Update.

Notes to Editors:

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SOURCE BNY Mellon