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Citi’s Chief Economist Willem Buiter is out with a new global economic outlook.There’s a lot of meat to it, but here are the key points:
- Strong global growth this year and next. Global GDP of 3.5%-4% each of the next two years. US GDP will recover by strong business investment and lower energy costs.
- The ECB will signal another rate hike, probably coming in July.
- The EMU credit crisis is not going away, and there’s a good chance of restructuring in Greece, Ireland, and Portugal, while the fiscal slippage risks in Spain aren’t totally appreciated.
- The reputational capital of the US continues to erode, as the dollar slides despite strong dollar rhetoric.
- But in the short term, expect the dollar to rise.