Citi Expects Strong Economic Growth

Citigroup Inc. (C - Analyst Report) forecasts strong economic growth in many countries in 2010. But although the company expects several countries to experience economic growth, it predicts that the growth will be somewhat uneven.

According to the annual report of Citi’s Investment Research and Analysis group, though growth will be strong and even across major economies in the beginning of the year, it will be uneven later. Citi expects Asia, excluding Japan, to experience sustained economic growth. Though the U.S. is expected to see fairly strong economic growth, the recovery will be more gradual in Europe and Japan.

Citi also upgraded its 2010 gross domestic product forecasts for the U.S., Japan, the U.K., Australia, New Zealand, Hong Kong, Korea, Argentina, Hungary, Poland, the Czech Republic and Turkey.

The report also suggested that Central Banks are unlikely to hike key interest rates through the next year. However, credit availability is expected to remain restricted at least for a year or two as banks seek to raise additional capital under regulatory pressure. Also, inflation on a global basis appears to be controlled. Additionally, countries will need to achieve fiscal sustainability to post strong economic growth.

The rankings of global economies are expected to change significantly in the next 5 to 15 years as Asia is predicted to experience rapid industrialization and increased domestic demand while resource-rich regions such as Africa, the Middle East, Latin America, Russia and Brazil see growth.

Citi is a leading global financial services company and has approximately 200 million customer accounts, doing business in more than 140 countries. Hence, the company’s earnings will be benefited with the accuracy of the forecast.

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