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BlackRock Sees U.S. Economic Growth as Europe Faces Recession

January 06, 2012

Jan. 5 (Bloomberg) -- BlackRock Inc., the world’s biggest money manager, said the U.S. economy may grow as much as 2.5 percent this year even as Europe faces a recession after failing to solve its sovereign-debt crisis.

The U.S. may expand 2 percent to 2.5 percent next year, Robert C. Doll, BlackRock’s chief equity strategist, said today. Russ Koesterich, chief investment strategist for the New York- based firm’s iShares unit, forecast expansion of 1.75 percent to 2.5 percent. Both said Europe may enter a recession.

“In 2012, the big swing factor for the world economy will be the success of the continuing effort to fix Europe’s debt and credit issues,” Doll said. “Failure to advance this effort could be disastrous.”

BlackRock forecasts are more optimistic than those of rival Pacific Investment Management Co., which last month predicted U.S. growth of 0 percent to 1 percent. Recent reports have shown the economy strengthened at year-end, with an index of consumer confidence rising and the pace of firing declining.

BlackRock, which manages $3.3 trillion globally, hasn’t published a firm-wide forecast and individual units can have differing outlooks.

‘Great Idle’

“The most recent measures indicate that growth in the U.S., other developed countries and emerging markets is stabilizing, albeit at a below trend level,” Koesterich wrote today in his outlook for the year. “The global economy in 2012 will likely remain in its ’Great Idle,’ with slow, positive growth and an economic crisis avoided.”

Bill Gross, chief investment officer of Newport Beach, California-based Pimco, wrote yesterday that the global markets and economies are at “great risk” and that the financial markets are “slowly imploding.” In a reversal from last year, Gross recommended that investors find ways to hedge their bets, including investing in U.S. Treasuries and the dollar.

--Editors: Christian Baumgaertel, Steven Crabill

To contact the reporter on this story: Sree Vidya Bhaktavatsalam in Boston at

To contact the editor responsible for this story: Christian Baumgaertel at

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