G7 economies set to grow again, but timidly

LONDON (Reuters) - The world's richest economies will grow again before year-end as the choke-hold of the worst recession in generations gradually eases, but Reuters polls of economists show widespread doubt about the recovery's strength.

Surveys of more than 150 analysts across the Group of Seven industrialized nations showed upgrades to near-term growth forecasts for most countries, although expectations for 2010 remain sluggish and barely changed over the past month.

The Reuters poll results will certainly provide comfort to those who have made aggressive bets on an economic recovery beginning this year. But forecasts for a sharp rebound, or what is often called a V-shaped recovery, are few and far between.

"Signs from consumers suggest a key component of economic recovery is not prepared to carry its weight," noted Robert DiClemente, chief U.S. economist at Citi in New York.

"Financial market participants and policymakers will need to pay close attention to the path of consumer spending as this slower pace of inventory unwinding boosts GDP."

So far it appears gross domestic product in developed economies has had a boost from a searing pace of inventory depletion running its course, leaving companies with no choice but to ramp up production in order to meet even feeble demand.

Yet prospects for the G7 remain dim compared with most Asian economies, which are set for a sharp rebound in 2010, according to the latest Reuters poll of more than 100 economists across the region, also published Wednesday.

Global economic growth is set to mark a 1.5 percent decline this year, based on forecasts gathered from across the G7, followed by a fairly strong pickup to 2.5 percent in 2010 driven by emerging economies.

The range of GDP forecasts provided for G7 economies was wide, although there has been some narrowing, coinciding with a powerful stock market rally this year that has major indexes up 30 percent since March, some more than half.