By Andy Bruce
LONDON (Reuters) - Stagnation is probably the best many of the world's biggest developed economies can hope for over the next year, with several facing a significant chance of recession, Reuters polls of around 350 economists showed on Thursday.
After a promising start, 2011 has turned into an enormous disappointment for major rich world economies, which have been hobbled by a noxious combination of austerity, debt crises, natural disaster and political impasse.
Backed up by Thursday's weak trade figures from China, which pointed to profound global economic weakness, the October quarterly survey suggested a bout of weak growth in many G7 economies could extend deep into next year and beyond.
The world economy will grow 3.8 percent in 2011, the poll showed, and just 3.6 percent next year -- a stark contrast to the 4.1 percent and 4.3 percent forecasts from the last quarterly survey in July.
But even these tepid growth rates could depend on progress in clearing some of the world's biggest economic hurdles, like the euro zone sovereign debt crisis and finding ways to boost growth in the United States.
"Rarely has the economic outlook been so sensitive to the decisions of politicians on both sides of the Atlantic," said Peter Hooper, chief economist at Deutsche Bank Securities, in a research note.
"Whether it is the complexities of reaching unanimous agreement among 17 euro area members regarding the resolution of the sovereign debt crisis, or the increasingly polarized U.S. political scene, political risk may be the greatest source of shocks to the global economy today."
Euro zone officials on Wednesday indicated they were willing to take at least a small step forward in plans to avert a potentially catastrophic Greek sovereign debt default, by asking banks to accept losses of up to 50 percent on Greek debt holdings.
In the United States, the Senate defeated President Barack Obama's job creation package in a sign that Washington may be too paralyzed to take major steps to spur the labor market before the 2012 elections.
CANADA BLOOMS, ITALY WILTS
Canada should see some of the strongest rates of growth compared with its G7 peers this year and next.
Although the outlook for growth has darkened in common with other major markets, its healthy banking sector and commodity-driven economy should give it an edge, with growth of around 2.2 percent seen this year and 2.4 percent in 2012.
But Italy, racked by political fighting, austerity measures and market fears about its ability to finance its debt, looks set to linger in recession well into next year, and will miss government fiscal targets.
U.S. economic growth looks likely to pick up slightly by year-end, although analysts also reined in their expectations and there is a one-in-three chance the world's biggest economy will enter recession.
"We've stepped back from the abyss, the data that we're getting suggests certainly the economy isn't in freefall as yet," said Scott Brown, chief economist at Raymond James.
The euro zone faces a 40 percent chance of another recession as fears mount that the debt crisis will escalate further.
Analysts expect the 17-nation currency bloc to post economic growth of just 0.9 percent next year, after 1.6 percent in 2011.
"Leading indicators point to weaker economic conditions. Sentiment surveys have deteriorated across key sectors of the euro zone economy, against a backdrop of unusually high uncertainty and financial market tensions," said Ken Wattret at BNP Paribas.
Japan, forced into recession by the March earthquake and tsunami, saw its economic outlook downgraded for a fourth consecutive month thanks partly to the escalating euro zone debt crisis.
"Japan's exports are seen weakening in October-December due to the economic slowdown in Europe and the U.S., which would affect corporations' capital spending," said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.
Still, poll respondents predicted growth will pick up to 2.2 percent over the 2012-2013 fiscal year.
(Polling by Reuters Polls Bangalore, Additional reporting and polling by reporters in bureaux in London, New York, Toronto, Paris, Rome, Tokyo, Berlin; Editing by Catherine Evans)