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Global pessimism worsens: PIMCO
PIMCO's global institutional clients have become more pessimistic about the prospects of global growth since the group's last survey in March.
Only 20 per cent of respondents in September's semi-annual survey were optimistic about the outlook for the US - down from 50 per cent who held this view in March. The survey group was also increasingly pessimistic about Europe.
Pessimists rose from 67 per cent to 95 per cent since the March survey, with forecasts that European growth would be -0.5 per cent. Respondents were evenly divided on the outlook for China.
John Wilson, head of PIMCO Australia, said expectations about the Australian outlook had also worsened since March. "Only 30 per cent of respondents were optimistic about the Australian economy, forecasting 4 per cent growth in September versus 58 per cent in March," he said.
Despite more individuals being pessimistic about the Australian growth outlook relative to the March survey results, Wilson said Australia still has flexibility to steer the economy.
"The current monetary and fiscal policy stance, as well a floating currency, gives Australia's policymakers ample flexibility to cut interest rates and provide liquidity support for banks if necessary," he said.
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