C. Fred Bergsten, director of PIIE, told us the USA economy is on the mend Monday night at the annual banquet of the International Relations Council of Kansas City. Bergsten is the director of Peterson Institute for International Economics, and believes that most economic forecasts are too gloomy. PIIE predicts that real GDP growth in the world will be 4.2 percent in 2010 over 2009, and real GDP growth in the United States will be 4.0 percent from the middle of 2009 through the end of next year. This is only about two-thirds the pace of typical US recoveries from sharp recessions but it is nearly double the consensus predictions of other top forecasters.
PIIE asserts that a V-shaped recovery is still the most likely course, meaning a they anticipate a steep recovery following a deep recession. Many forecasters have predicted a flat, slow recovery. Let’s hope Bergsten and PIIE are right, but I’m not going to go into big debt until things feel a lot better!