To: carranza2 who wrote (19369 ) 6/13/2007 12:47:57 PM From: elmatador Respond to of 217542 According to Merrill Lynch, global economic decoupling gathers pace 10-Jun-2007 Merrill Lynch According to Merrill Lynch’s mid-year 2007 global economics report “Global Decoupling: A Marathon, Not A Sprint”, the global phenomenon of a decoupling between the economies of the USA and the rest of the world is becoming more pronounced and is set to last. Merrill Lynch’s view on decoupling reflects how the US economy has shifted to a lower gear. The Asian economy is displaying resilience. GDP in the region is growing strongly despite a slowdown in exports to the US due to higher exports to Europe and other parts of the world. Alex Patelis, Head of International Economics, Merrill Lynch, said, “If anything, our bullish call on global growth last September was not bullish enough. Looking into the balance of 2007, our view stands intact. This is a year of transition as the US passes the global growth baton to the rest of the world”. The Merrill Lynch’ global economics team believes that the global economy will continue to grow in 2007 with no sign of a significant cyclical slowdown. The bank’s economists are more bearish than most on the prospects for the US economy, but are more bullish than consensus about the rest of the world. decoupling is not simply a cyclical trend. Structural forces, such as a sustained investment spending boom outside the US are driving this global economic force and giving it longevity. inflation poses the biggest risk to global growth and the threat it poses is higher than the market is currently anticipating. Merrill Lynch forecasts non-US inflation to rise to 3.4% in 2008 from 3.2% in 2007