World economy to grow 2% in 2010, Capital Economics

Capital Economics has predicted a 2% growth in world real GDP for 2010, rising to 3.5% in 2011.

The estimate is based on continued falls in worldwide manufacturing output and faltering commodity prices and compares to 3.2% in 2008 and 5.2% in 2007. The group is also concerned about the future impact of government asset purchase schemes. The Bank of England announced this week it was to stop its own Quantitative Easing programme after an expenditure of £125bn in the secondary gilts market. According to Capital Economics' Global Overview paper today: "The worst case scenario of a complete financial and economic meltdown has been averted. "Nonetheless, some of the alternative...