June 7 (Bloomberg) -- The U.S. economy is growing above “stall speed,” according to Alan Ruskin, global head of Group- of-10 foreign-exchange strategy at Deutsche Bank AG in New York
“A lot of people say that if the U.S. economy slows below 2 percent in year-over-year gross domestic product historically, we’ve slipped in to recession,” Ruskin said in an interview on Bloomberg Television’s “Midday Surveillance” with Tom Keene. “The key is that we stay above that line, otherwise that is perceived as stall speed and other issues kick in.”
The U.S. economy is forecast to expand 2.7 percent this year, according to the median estimate of 72 economists surveyed by Bloomberg, after growing at a 1.8 percent annual rate in the first quarter. Projections are for 1.9 percent growth in the euro zone countries and 2.8 percent in Australia, separate surveys show.
“We were at the epicenter of the financial crisis and you typically see much slower growth post-financial crisis and that’s what you’re seeing,” Ruskin said. “I am personally quite constructive on the global economy.”
The Federal Reserve’s U.S. Trade-Weighted Major Currency Dollar Index, which measures the dollar’s performance against seven currencies, has fallen 12 percent during the past year. It reached a record low of 68.2405 on May 2, which has helped exports increase to a record $172.7 billion in March.
“A weak-dollar policy to some extent is part of the reflation story, not only in the U.S., but externally as well,” Ruskin said. “I wouldn’t say it’s a policy prescription per se, but is there an element of benign neglect here? Yes.”
--With assistance from Catarina Saraiva in New York. Editors: Paul Cox, Greg Storey
To contact the reporters on this story: Allison Bennett in New York at firstname.lastname@example.org; Tom Keene in New York at email@example.com