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Economic recovery still far off, says Invesco

Economic recovery still far off, says Invesco

The economic slump won't begin to ease until at least 2010 as massive debt weighs down consumers and companies in developed countries despite government stimulus measures in the U.S. and Europe, the chief economist of giant investment firm Invesco Ltd. said Wednesday.
"There's no sign of a bottom yet," economist John Greenwood told reporters in Hong Kong. "It's quite likely that it will take a prolonged period of time in the Western countries to see a recovery."
With the U.S. struggling under a recession, the incoming Obama administration and Congress are crafting a package to resuscitate the economy that could cost $800 billion.
Greenwood cast doubt on "hyperactive" fiscal and monetary programs in the short term. Their effects would be blunted as long as debt-saddled consumers and corporations were still hesitant to borrow and spend.
"It is not clear at all that those programs can be very effective very quickly," said Greenwood, whose company manages some $410 billion in assets. "In fact, I would say that there is a high probability of disillusionment about the Obama fiscal spending program over the next year."
For 2009, Greenwood recommended against stocks in favor of government bonds, corporate bonds and emerging market sovereign bonds that are dollar denominated. Asian stocks were unlikely to recover unless other markets did as well, he said.
"It will not be appropriate in our view to move significantly back into equities until at least 2010, maybe later," he said.


Updated : 2020-12-02 09:09 GMT+08:00