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Growth outlook wilting across economies: Poll

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BENGALURU : Major central banks are done tightening policy, according to a majority of economists polled by Reuters, with the growth outlook weakening across developed and emerging economies along with scant prospects for a surge in inflation.

While that is largely reflected in bond markets, with major sovereign bond yields falling this year, global equities have rallied and the S&P 500 index is near record highs after its best start this year in more than three decades.

One striking conclusion from the latest surveys of more than 500 economists, covering over 40 economies, was not just a toning down of the economic outlook, but a clear shift away from long-held optimistic views.

Although economists who answered an additional question were split on whether a deeper global economic downturn was more likely than a synchronised rebound, this year's growth outlook was downgraded or left unchanged for 38 of the countries polled.

"The recent weakness of global growth will persist for much longer than is commonly assumed.

"A dovish turn by central banks and stimulus in China will not be enough to boost world GDP growth from its current slow pace," noted Ms Jennifer McKeown, head of global economics at Capital Economics.

"Disappointing economic performance will leave inflation very low and cause monetary policy to be loosened almost across the board. But we do not see this prompting any meaningful recovery until 2021." - REUTERS