Pacific Investment Management Company: Growth and wealth will shift to emerging economies such as Brazil, China and India

On Bloomberg today:
“Pacific Investment Management Co. said the debt crisis in Europe shows its outlook for an extended period of below-average economic growth remains valid, even after global markets rebounded from the financial crisis”
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“What is happening in Europe is a vivid illustration of an underlying theme of the new normal,” Mohamed El-Erian, the chief executive officer of Pimco, said in an interview. There are “structural forces overwhelming traditional cyclical ones,” he saidPimco, which coined the phrase “new normal” a year ago to describe a world characterized by high unemployment rates, more regulation, and a shrinking importance of the U.S. in the global economy, reiterated the view at its annual investment meeting last week in Newport Beach, California, the firm said today on its website. t is even clearer today than it was a year ago that the global economy has embarked upon a multiyear journey that is subject to many tensions,” El-Erian wrote in a commentary on the website
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“Growth and wealth will shift to emerging economies such as Brazil, China and India, driven by rising employment and income, according to Pimco. Europe will struggle as it tries to ward off deflation, and questions are “multiplying” about the euro and the makeup of the euro zone, El-Erian said.

Tags: the new normal