Central banks’ efforts to bolster their economies by printing money will eventually lose momentum, putting more onus on governments to improve financial health, Honeywell International Inc. Chief Executive Officer Dave Cote said.
Cote, a steering committee member for the Campaign to Fix the Debt and an appointee to President Barack Obama’s 2010 fiscal commission, has blamed gridlock among the world’s large democracies for impeding solutions to high debt and eroding business confidence.
Over the next three years, Europe may have no growth and the U.S. economy may sputter annually at 2 percent, Cote told Trish Regan in a Bloomberg Television interview before a University of New Hampshire event. India may “stay mired” at 5 percent to 6 percent growth. China is looking better and may expand 7 percent, he said.
“Things would be even worse” without stimulus from central banks, Cote said in an interview. “But that runs out of rope at some point. They are buying time, but governments need to act.”
Companies are ready to invest if they see government progress to solve fiscal problems, he said. Morris Township, New Jersey-based Honeywell has said it plans capital expenditures of $1.2 billion this year, up $300 million from last year.
“It could be the spark of a real global renaissance because there is a lot of money out there and there’s a lot of businesses who want to start taking charge and doing things,” Cote said. “There is a lot of opportunity out there, but government needs to lead.”