Deloitte issues gloomy economic outlook

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Deloitte has given a lukewarm view of the economic outlook as clues to the
shape of an eventual financial revival remain unclear.

In its third quarter economic review, Deloitte said the near-term outlook for
the economy had brightened up, forecasting very weak growth in 2010 and 2011.
But it also issued medium-term concerns.

‘The risk of an extreme scenario to the downside of our forecast has
diminished as the green shoots of recovery have developed and confidence in the
banking system has improved. But the economic climate is still unusually
uncertain,’ said Deloitte’s chief economist Roger Bootle.

‘A deflationary spiral, or worse than expected financial services sector
losses stemming from a rise in personal and corporate bankruptcies seem to be
the key medium-term downside risks.’

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