PIMCO raises growth forecast for US economy to 3% - 3.5%
Pimco sees the economy growing 3 percent to 3.5 percent in the fourth quarter of next year from the same period of this year. That compares with its previous estimate for 2 percent to 2.5 percent growth and the 2.2 percent gain forecast for this year by the International Monetary Fund.
“The U.S. is using fiscal and monetary policy to try to attain escape velocity for the economy,” El-Erian said in a telephone interview today from his office in Newport Beach, California. “What we don’t know yet is whether that will be enough not just to change the economy’s trajectory for one year but to place it on a medium-term sustainable path.”
U.S. stocks extended gains on news that Pimco had raised its U.S. growth forecast for 2011. The Standard & Poor’s 500 Index rose 0.4 percent to 1,233.00, closing at its highest level since September 2008.