Pimco’s El-Erian Sees Global Growth at About 3% in 2014Alexis Leondis
Pacific Investment Management Co.’s Chief Executive Officer Mohamed El-Erian said he expects the global economy to expand 2.75 percent to 3.25 percent next year.
“The big question is less the next 12 months and more what happens thereafter because the road we’re on right now is being sustained by experimental, untested policies,” El-Erian, also co-chief investment officer of the Newport Beach, California-based firm, said today in a radio interview with Tom Keene on “Bloomberg Surveillance.”
Minutes of the Federal Open Market Committee meeting Oct. 29-30 released Nov. 20 showed that Federal Reserve officials expected to reduce their unprecedented asset purchases “in coming months” as the economy improves. The central bank surprised investors by not announcing a tapering of its stimulus after its September meeting.
The U.S. and Japan have outperformed other markets because of central bank stimulus programs, El-Erian said. The Fed will start reducing its purchases in the next six months to 12 months because continuing to buy assets involves costs and risks, according to El-Erian. The Fed will keep interest rates at zero and become more aggressive with guiding the markets on its moves, he said.