“Europe has the weakest fundamentals,”
The euro bloc economy may stagnate or expand by 1 percent this year, while the U.S. and the Middle East grow at about 3 percent or more, he said. Emerging markets will expand by between 6 percent and 8 percent, Bray said.
The debt crisis that began in Greece more than two years ago and spread to Ireland, Portugal, Italy and Spain has weighed on the region as government austerity programs drove up unemployment, choking growth. Unemployment in the euro zone rose to 10.7 percent in January, a 14-year high, the European Union’s statistics office said today.
The region will contract 0.6 percent this year, before returning to growth of 0.3 percent in 2013, according to the median estimate of at least 16 economist forecasts compiled by Bloomberg. The U.S. economy will expand 2.2 percent in 2012 and 2.5 percent next year, while Japan will grow 1.5 percent and 1.40 percent, separate surveys show.
The euro has weakened sharply against the dollar this year and Bray excepts this trend to continue, predicting the Euro will fall below the $1.15 level before the end on 2012.
“Most countries coming out of this crisis see a weak exchange rate as one part of the remedy,” Bray said. “In my view, actually a weaker euro is something that is in the books and part of an adjustment process in peripheral countries and that is not looked at too critically.”