Morgan Stanley forecasts 'sustainable' US recovery

Morgan Stanley is predicting a "slow but sustainable" economic recovery in the US, and forecasts 2.6% GDP growth by next year.

At its Global Economic Forum, the investment bank says it has increased its estimate for real growth in the second half of 2009 to 2.75%, from 1.25% a month ago. The bank, which based its new estimate on US economic data, says the recovery may be bumpy but estimates US growth could reach 3.25% - and real GDP growth 2.6% - in 2010. Morgan Stanley has identified three factors it says will drive a sustainable, long-term recovery. It cites the improvement in financial conditions, saying it is driving recovery in the credit market, and says the effects of fiscal stimulus are also beginn...