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Global Economies Likely to Avoid Double Dip: Scotiabank 2011-12 Outlook for Global Economies, Markets and Currencies

TORONTO, Ontario, December 07, 2010 — Global economies are likely to avoid a double-dip recession, according to Scotiabank Chief Economist Warren Jestin, co-author of a comprehensive forecast unveiled today at Scotiabank's 2011-12 Economic and Market Outlook Conference (EMOC).

"Global economic activity has decelerated in recent months, with next year's growth in North America, Europe and Japan likely to fall short of the average pace set in 2010," said Mr. Jestin. "The severe financial strains confronting some debt-heavy European nations and the U.S. probably won't trigger a double dip. However, the lengthy process of bringing outsized fiscal deficits under control, withdrawing unprecedented monetary stimulus and restructuring the global financial system will impede growth prospects in many countries through mid-decade."

ScotiaMcLeod Equity Trading Director Fred Ketchen moderated EMOC presentations by Mr. Jestin, Vincent Delisle, Director of Portfolio Strategy, Scotia Capital and Camilla Sutton, Chief Currency Strategist, Scotia Capital, who shared outlooks on what 2011 and 2012 will bring for the global economy, capital markets and currencies.

Highlights of Mr. Jestin's presentation include:

"A sub-par recovery in developed economies, the U.S.'s excessive monetary stimulus campaign, China's tightening bias and Europe's debt problems explain recent market volatility," added Mr. Delisle. "As we head into calendar 2011, these items should continue to challenge investor sentiment and trigger sporadic shifts in the risk-on/risk off mentality."

Highlights of Mr. Delisle's presentation include:

"As we move into 2011, the global economy, financial sector and monetary authorities are balancing on a tightrope,'" said Ms. Sutton. "The path that lies ahead for Europe is of prime concern, but so too is the strength of the global recovery and U.S. monetary policy. The risks have increased, which will likely encourage investors to pay increasing attention to currency risk."

Highlights of Ms. Sutton's presentation include: