US, UK & rest of world growth rift to widen in H2: Pimco
Published on Tue, Mar 16, 2010 at 11:07 | Source : CNBC-TV18
Updated at Tue, Mar 16, 2010 at 14:57
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US, UK & rest of world growth rift to widen in H2: Pimco
CNBC's Joe Kernen spoke to Pimco's CEO & Co-CIO, Mohamed El-Erian on the markets adjusting to the ‘new normal’ – that’s the phrase that Mohamed El-Erian coined. "In the second half of this year, we expect the difference between the growth in the rest of the world and the growth in the US and the UK to get larger."
Q: We have talked about reflation a lot and we talked about healthcare passes and just looming David Walker type concerns for entitlements across the board. Are you ready to duckin cover in terms of a coming period of reflation, global reflation, is that something you are worried about on a secular timeframe?
A: I expect and our work at Pimco expects what we call a multi speed world, there is going to be part of the world that's going to grow and grow robustly. There is going to be another part, the US and UK, that's going to have difficulty once all these stimulus and inventory cycle goes through. So in the second half of this year expect this difference between the growth in the rest of the world and the growth in the US and the UK to get larger and then the question becomes protectionism. What is the risk of protectionism? That's why all this chat that's going on right now is so important.
