Bill Gross’s Pacific Investment Management Co., or Pimco, recently raised its outlook for the U.S. economy, stating that expansion is likely to be between 2.5% and 3% over the course of the year. At the end of last year, the fund estimated growth of between 2.25% and 2.75%.
According to Pimco, the adjusted assessment is a result of “trends toward growth and spending in the consumer, corporate and public sectors.”
“The global economy will likely experience steady, broad-based growth in 2014 thanks in no small part to the extraordinary expansion in central bank balance sheets in 2013,” said portfolio manager Saumil H. Parikh.
Pimco’s report went on to explain that “rising asset prices in combination with fading near-term fiscal uncertainties will drive global aggregate demand growth forward, adding stability to what has thus far been an on-again, off-again global recovery from the financial crisis of 2008.”
Pimco also reassessed its outlook for the euro zone, now claiming to expect real economic growth in the region to measure between 1% and 1.5%.
“We expect the reduction in fiscal drag in the euro zone periphery will reinforce gradually improving credit conditions to drive aggregate demand growth from well below potential to up toward potential in the year ahead,” Parikh said.
The report also revealed the fund’s expectations for China and Japan in 2014.