2014

Standish Sees Global GDP Accelerating to 3.5 Percent in 2014 BNY Mellon Investment Boutique Warns of Deflationary Risks in Europe

NEW YORK and LONDON, Dec. 16, 2013 /PRNewswire/ -- Global gross domestic product (GDP) could accelerate from 3.0 percent in 2013 to 3.5 percent in 2014 while inflation remains uncomfortably low in developed market countries.  Those were among the views expressed in the December Global Macro Views: 2014 Outlook from Standish, the Boston-based fixed income specialist for BNY Mellon.

The deflationary risks could be particularly acute in the euro area, the report said.

In the U.S., Standish expects economic growth to accelerate from 2.1 percent in 2013 to 2.5 percent in 2014 as the impact of the drag from fiscal policies begins to fade. This could lead the Federal Reserve to wind down its quantitative easing program by the end of 2014, Standish said.

"Although housing investment is likely to moderate due to the rise in interest rates, business investment could accelerate moderately as companies seek to replace aging capital stocks," said Thomas D. Higgins, chief economist and global strategist for Standish.  "We see upside potential to our forecast for both growth and inflation in the U.S. given stronger household balance sheets and an improving labor market."

While Standish is looking for moderate GDP growth of 1.2 percent in the euro area in 2014, it also expects further monetary easing from the European Central Bank to deflect the threat of deflation.  The risk of disinflation is partly driven by the internal devaluations of the peripheral economies as they seek to regain competitiveness by lowering their domestic price levels, Standish said.  The United Kingdom could outperform the euro zone and achieve GDP growth of 2.4 percent in 2014, the report said.

The currencies of emerging market economies have been stressed as the Fed increased the probability of tapering its easing program.  However, Standish said the accelerating global economy could raise the growth rate of emerging markets from 4.6 percent in 2013 to 4.9 percent in 2014.

In Asia, Standish expects Chinese GDP to decelerate to 7.0 percent, a result of government policies to lessen state intervention in the economy.  While some of the reform measures are expected to boost growth, others such as stricter government budget restraints and increased bank governance could have a negative impact on growth.  For Japan, Standish expects GDP growth to average just below two percent, and believes the government will expand its quantitative easing program to further stimulate the economy.

GDP growth in Latin America could increase to 3.1 percent in 2014, Standish said.  While the region remains vulnerable to declines in commodity prices due to the slowing Chinese economy, Standish expects that to be offset by increasing demand in developed nations.

Notes to Editors:

Standish Mellon Asset Management Company LLC, with approximately $163 billion of assets under management, provides investment management services across a broad spectrum of fixed income asset classes. These include corporate credit, emerging markets debt (dollar-denominated and local currency), core / core plus, tax–sensitive, short duration, stable value and opportunistic (U.S. and global) strategies.  Standish also offers full service capabilities in insurance client strategies and liability driven investing. The firm includes assets managed by Standish personnel acting as dual officers of The Dreyfus Corporation and The Bank of New York Mellon and Alcentra NY, LLC personnel acting as dual officers of Standish.

BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.5 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle.  Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets.  As of Sept. 30, 2013, BNY Mellon had $27.4 trillion in assets under custody and/or administration, and $1.5 trillion in assets under management.  BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).  Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.

All information source BNY Mellon as of Sept. 30, 2013. This press release is qualified for issuance in the UK, Europe and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. Any views and opinions contained in this document are those of the author as at the date of issue; are subject to change and should not be taken as investment advice. BNYMAMI and its affiliates are not responsible for any subsequent investment advice given based on the information supplied. This press release is issued by BNY Mellon Investment Management (US) and BNY Mellon Asset Management International Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Registered office of BNY Mellon Asset Management International Limited: BNY Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorized and regulated by the Financial Conduct Authority. A BNY Mellon Company.

Contact:

 Mike Dunn

Sarah Deutscher


+1 212 922 7859

+44 20 7163 2744


mike.g.dunn@bnymellon.com  

sarah.deutscher@bnymellon.com  

SOURCE BNY Mellon



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