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2013 Set for Global Grind But These Economies Could See an Upside Surprise

Daily Ticker

As 2012 comes to a close, many have hopes for an improved economy in the new year. Editors at The Economist are not so optimistic and believe the global economy in 2013 will be more of a "grind."

"There is a big gap, as there has been in many recent years, between the outlook in the emerging markets and the rich worlds," says Daniel Franklin, executive editor of The Economist and editor of The World in 2013. "The emerging markets, as a total, are going to be growing by 6%; the rich world by less than 2%."

Goldman Sachs is telling clients that the BRICs (Brazil, Russia, India, China and South America) will make a comeback next year and be a prime investment opportunity.

Franklin also predicts a better year for China in 2013. "Those double-digit growth rates are a thing of the past but next year we will probably see 8% plus, which is reasonably healthy," says Franklin.

As for Europe, Franklin believes the region will remain in a recession and says Europe presents the biggest risk to the global economy, absent war or another natural disaster.

U.S. growth could actually be better than expected, Franklin notes, if there's no major shock from the eurozone. He forecasts 2.5% growth in the U.S. in 2013.

Bottom line: The economy will be a worry almost everywhere in 2013; the BRICs will have the upper hand and there could be an upside surprise for the Chinese and U.S. economies.

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