Four Causes for Acceleration in 2014 Global Growth Says BNY Mellon's Richard Hoey

NEW YORK and LONDON, Nov. 13, 2013 /PRNewswire/ -- An acceleration in global economic growth is expected in 2014, supported by aggressive easy monetary policies in most developed countries according to BNY Mellon Chief Economist Richard Hoey's "Outlook 2014."  Global GDP growth should accelerate by one-half of one percent to three-quarters of one percent from the prior pace near 3% in both 2012 and 2013.

"We believe that the implication of 'Yellenomics' is that monetary policy will be very supportive of economic expansion for the next several years,"  Hoey says, referring to Chairman of the Federal Reserve nominee Janet Yellen, whom Hoey expects will be confirmed by the Senate. 

Global growth acceleration should be led by the developed world, in continued recovery from past economic weakness, for these four reasons: (1) past and ongoing monetary ease, (2) reduced fiscal drag, (3) moderation in the post-crisis deleveraging of the private sector and (4) moderate energy prices, given the expansion of new sources of energy supply, especially in the U.S.

Turning to the U.S. budget, Hoey thinks that future budget battles will end in a low level status quo stalemate rather than repeating the recent pattern of disruptive major clashes over budget policy.

"We believe that the U.S. budget battles have moved from a World War II phase of rapidly moving front lines to a World War I phase of static front lines and trench warfare," Hoey says.  "Rather than some 'grand bargain,' we expect minor budget compromises with little policy change and substantially less disruption than in the last several years."

Other Outlook 2014 findings include:

2013 TAPER TALK/2014 TAPERING – The actual taper of U.S. QE3 that Hoey expects to occur in 2014 may prove less disruptive than the mid-2013 sell-off on "taper talk" since the gap between current QE-suppressed Treasury yields and free-market levels has already been reduced, according to Hoey.

MUTED EUROPEAN EXPANSION – Stagnation in the U.K. has given way to a sustainable expansion and the outlook is favorable. In Europe, the euro should remain intact, the double-dip recession has ended and a sustained but muted expansion has begun, according to Hoey.   The pace of economic growth in Europe over the coming years is likely to be modest, however, given a combination of high debt burdens, challenging demographics, and only hesitant movement towards reducing north/south imbalances within the Eurozone.

ABENOMICS FAST TRACK – Following two decades of stagnation, Japan is experiencing a fast pace of growth in the early phases of Abenomics, the report states.  After a volatile pattern of pre-buying, then payback, due to the hike in the Value Added Tax scheduled for April 2014, moderate expansion should persist.

See http://www.bnymellon.com/foresight/markets-economy/outlook-2014-video-richard-hoey.html for Hoey's complete 2014 Outlook.    

Notes to Editors:

BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.5 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle.  Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets.  As of Sept. 30, 2013, BNY Mellon had $27.4 trillion in assets under custody and/or administration, and $1.5 trillion in assets under management.  BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).  Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.

All information source BNY Mellon as of Sept. 30, 2013. This press release is qualified for issuance in the UK, Europe and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. Any views and opinions contained in this document are those of the author as at the date of issue; are subject to change and should not be taken as investment advice. BNYMAMI and its affiliates are not responsible for any subsequent investment advice given based on the information supplied. This press release is issued by BNY Mellon Investment Management (US) and BNY Mellon Asset Management International Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice.  Past performance is not a guide to future performance.  The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. Registered office of BNY Mellon Asset Management International Limited: BNY Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorized and regulated by the Financial Conduct Authority.  A BNY Mellon Company.

SOURCE BNY Mellon

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