US banking giant Citigroup today said lingering Japanese nuclear crisis and widespread political unrests in West Asia and resultant spike in crude prices, are unlikely to alter the global growth prospects.
"Our global economic outlook and strategy report has been clouded by two major shocks in recent months - the high level of oil prices plus the earthquake and tsunami in Japan. But our conclusion is that these shocks do not greatly alter global growth prospects for 2011 and 2012, and that global growth will remain strong in the year ahead," Citigroup said in its global economic outlook and strategy report, released today.
"Over the past three months, we've made more GDP forecast upgrades than downgrades, but this month there is a slight bias to forecast downgrades. This month, we've cut our 2011-12 forecasts for Brazil, Australia and Britain, but raised the same for Saudi Arabia, Russia, Venezuela and Switzerland," the report said.
The March 11 earthquake and ensuing tsunami, which has washed away dozens of cities on the northeastern coast of Japan and killed over 20,000, caused about 26 trillion yen in damage to the economy.
According to Japan's Finance Ministry estimates, the devastation would shave off at least 0.5% of the GDP of the world's third-largest economy this year.
Further crippling the fragile global recovery is the political crisis in West Asia, which began with the popular uprising in Egypt last month that saw the 30-year-old rule of Hosni Mubarak coming to an end.
