Positive economic growth in the US will return by no later than early Spring and real growth could be reasonably strong by the second half, according Merrill Lynch‘s chief investment officer, Bob Doll.
In an investment outlook report for 2002, released this month, Doll forecasts that the full year real term growth in global GDP is likely to fall short of 2.0%. This would be the second year in a row where global growth is below the 2.0% level and the first time that this has occurred since World War II.
A new bull market However, Doll believes that 2002 will see the continuation of the new bull market (positive market) that began in Q3 2001. However, he says that the magnitude of upward movement is likely to be muted by high valuation levels, a low savings rate and high consumer debt levels in the US.
“Since the United States has been most aggressive in its fiscal and monetary response to recessionary forces, it is likely that the US economy and markets will lead the rest of the world in recovery,” says Doll.
