HSBC cuts growth forecasts for most big economies

LONDON: HSBC on Tuesday cut its forecast for global economic growth in 2011 to 2.6 percent from 3.0 percent and scaled back its projection for 2012 to 2.8 percent from 3.4 percent.

“The message is simple: despite massive policy stimulus, healthy economic recovery is now but a distant dream,” chief economist Stephen King and colleagues said in a report. HSBC is the latest in a string of major banks to turn gloomy on the global outlook. It now expects the United States to grow 1.6 percent this year and 1.7 percent in 2012, down from 2.5 percent and 2.9 percent before. The euro zone is likely to expand 1.6 percent in 2011 and 0.7 percent next year, down from previous forecasts of 2.0 percent and 1.4 percent respectively.



Only Japan and China escaped HSBC’s axe. The bank still expects Japan’s economy to contract 0.6 percent this year before rebounding 2.4 percent in 2012. China will grow 8.9 percent this year and 8.6 percent in 2012, HSBC projects.