May 17, 2005

World economy on downturn?

by brian_turner

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A Merrill Lynch survey of fund managers has shown that investors are becoming increasingly pessimistic about the global economy and are anticipating weaker growth. Less than 25% of the 339 managers questioned in the survey expected growth to increase. Merrill Lynch said it was the most negative result since 2001.

The poll showed that attitudes had changed significantly over the last two months, with 56% of the fund managers surveyed now expecting global growth to weaken over the next 12 months. Most of the fund managers surveyed expected corporate profits to deteriorate slightly and inflation to increase. The euro was considered the most likely currency to depreciate over the coming year.

Merrill Lynch’s survey for the previous month, identified a division between investors in the US and Europe, who were cautious about the future, and investors in Asia, who were more optimistic. The latest survey showed a fundamental change, with Asian investors becoming more negative.

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