* Forecasts show U.S. pulling ahead after bumpy start
* Strong Q3 GDP a trailer for second half of next year
* China also favoured, but debt woes hobble euro zone
LONDON, Nov 25 (Reuters) - Here's a fairly safe bet for
uncertain times: the U.S. economy will once again show the euro
zone and Japan a clean pair of heels next year.
Forecasts for 2013 that are now landing thick and fast show
Federal Reserve Chairman Ben Bernanke is not alone in believing
it could be a very good year for America if politicians can
avoid tumbling off the so-called fiscal cliff.
Updated gross domestic product figures due on Thursday are
likely to show the U.S. economy was already doing quite a bit
better than first thought last quarter.
According to 60 economists polled by Reuters, the initial
estimate of 2.0 percent growth at an annualised rate is likely
to be revised up to 2.8 percent.
That pace will flag. Even assuming a political compromise to
dodge the fiscal cliff's full $600 billion in government
spending cuts and expiring tax breaks, the budget stance is
likely to tighten markedly in early 2013, crimping growth.
Luca Paolini, chief strategist at Pictet Asset Management in
London, is pencilling in U.S. growth of around 1 percent in the
first quarter. After that, though, thing should improve.
"The second quarter should be slightly better and, in the
second part of the year, we'll probably be above trend at around
3 percent or even higher," he said.
Contrast that with Japan, which Paolini said was doing "very
badly", and the euro zone, which contracted in the second and
third quarters. With Greece and other southern members choking
on debt, the single-currency area can expect a return to no more
than minimum growth in the first half of 2013.
Overall, the picture was murky. "Only emerging markets,
especially China, seem to be getting out of this pretty nicely,"
Paolini said. "But it's not enough. It's still a weak
environment."
Similarly, Morgan Stanley expects the global economy to
remain stuck in a twilight zone in 2013.
But growth in the United States should begin to expand at a
slightly above-pace trend from mid-year as policy uncertainty
lifts, the bank said in a report.
This was Bernanke's message in a speech last Tuesday.
"I do think there is important potential for the economy to
strengthen significantly if there is a greater level of security
and comfort about where we are going as a country," the central
bank chief said.
CONFIDENCE AND HOUSING
Tuesday's survey of U.S. consumer confidence in November
will provide an indication whether fiscal cliff jitters are
dampening spirits, which have improved in recent months on the
back of better job data.
The reviving housing market has also been brightening the
mood. The Case-Shiller home price index on Tuesday will show
whether price gains are still spreading across the country. If
they are, that can bode only well for the economy.
Vincent Reinhart and David Greenlaw at Morgan Stanley said
residential construction was likely to be the economy's standout
sector. "We look for sustained improvement in starts, sales and
prices over the next few years," they wrote.
James Malcolm, a currency strategist with Deutsche Bank in
London, said a multi-year upturn in U.S. housing should have
strong multiplier effects on jobs, tax receipts, personal wealth
and confidence - all bullish for the dollar.
The United States, as well as China, also looks attractive
to Singapore-based Richard Martin, managing director of IMA
Asia, an economic and business research consultancy.
Global risks should be receding by the second quarter. By
then, America ought to have resolved its immediate fiscal crunch
and China's new Communist party leaders will have taken over the
top government posts in March, Martin said.
This should accelerate corporate investment decisions and
turn 2013 into a better year than many expect: "By the third
quarter there should be plenty of evidence of firm upturns in
China and the U.S., which should clear some of the global
oversupply."
MORE EURO HAGGLING
The data highlights of the week in Europe are German
unemployment and euro-zone economic sentiment on Thursday
followed a day later by November's inflation rate.
But they pale in importance next to the latest efforts by
euro zone finance ministers to agree among themselves and with
the International Monetary Fund on how to stave off insolvency
in Greece.
Ministers meet on Monday for the third week in a row to try
to agree how to fill Athens's yawning funding gap, knowing the
euro itself could face a life-or-death test if Greece were to
tumble off this particular fiscal cliff.
That in turn would be fatal for Europe's growth prospects
and all bets on an improving trend in the United States and
China would be off.
"There are different alternatives being discussed all the
time. I do believe that next Monday we can reach a sustainable
and credible result," Finnish Finance Minister Jutta Urpilainen
told reporters on Friday.