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Thu 19 Nov 2009 08:06 AM

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GCC helping to lead global economic recovery

HSBC economists say emerging markets lead growth, while the West struggles in short term.

Emerging markets, like the GCC, will lead the global economic recovery, HSBC global and regional economists said on Wednesday.

Speaking at a conference in Bahrain, they said that while the West will continue to struggle in the short to medium term under high levels of debt, emerging markets were leading growth.

David Bloom, the bank’s foreign exchange strategy global head, quoted by the Gulf Daily News, said the region was on the “cusp of a big boom”.

"The Anglo-Saxon economies are in deep trouble with high risk and debt to gross domestic product levels running at 100 percent,” he said.

"They are running budget deficits and printing money and we are on the cusp of a big boom outside these economies.”

Bloom told the conference he expected emerging markets to do well on the back of stronger commodity prices.

Meanwhile, Simon Williams, Gulf markets chief economist, said the “downturn has run its course.”

"The storm has begun to pass and conditions are in place for a recovery with sentiment picking up. Banks may not actually be lending but they are at least liquid," he said.

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