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Global mid-year investment outlook looking up with 2014 growth accelerating faster than predicted

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Global mid-year investment outlook looking up with 2014 growth accelerating faster than predicted

New report from PineBridge Investments sees global economy as promising, with fundamentals returning to "normal" in developed world.

Global investment manager PineBridge Investments has a positive outlook for the global economy for the second half of the year.

According its report issued today, through the first half of 2014 the global economy is looking more promising than predicted at the start of the year, with growth in the United States and developed nations accelerating faster than expected as fundamentals are returning to normal.

The PineBridge Mid-Year Update looks at how the global economy has performed as compared to predictions at the beginning of the year. Markus Schomer, Chief Economist at the firm, believes that the outlook is increasingly looking up as the United States and the rest of the developed world continue to normalize while emerging markets are quickly progressing towards a new wave of reforms.

"Businesses are increasingly using up slack resources and will need to increase investment and hiring to maintain productivity and profitability."

"Five months in and our conviction has strengthened that 2014 is the year that we can finally look forward to the evolution of the business cycle and stop looking over our shoulders for more financial crisis fall-out," Schomer said in the report. "One driver of change is the productivity ceiling. Businesses are increasingly using up slack resources and will need to increase investment and hiring to maintain productivity and profitability. In addition, it seems that the Congressional politicking that dominated the U.S. outlook in recent years is slipping into the background."

US GDP growth so far in 2014 is tracking lower than previously estimated due to the unforeseen "Icy Patch" of harsh winter weather which slowed the U.S. economy in Q1. However, PineBridge still anticipates that U.S. GDP growth will average 3% for the rest of the year, a notable change from the 2.25% average in the past four years.

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