FACTBOX-Caterpillar’s 2010 predictions

CHICAGO, Jan 27 (BestGrowthStock) – Caterpillar Inc (CAT.N: ), the
world’s largest maker of construction and mining equipment,
reported stronger-than-expected earnings on Wednesday but
provided an outlook for 2010 that disappointed analysts and
sent its shares lower on Wall Street.

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For full coverage of Caterpillar results click:

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As it does every quarter, Caterpillar included some
predictions in its earnings release about everything from U.S.
interest rates to oil prices to global economic growth.

Below are some of the highlights:

* “Recent economic data indicates that the world economy
started growing again, ending the world’s worst postwar
recession. We expect this recovery to last throughout 2010,
with the world economy growing more than 3 percent.”

* “We expect interest rates will remain low since
unemployment rates are high and inflation rates are low. Even
though we do not expect inflation will become a problem, we
expect some central banks will eventually implement
precautionary interest rate increases.”

* “We project the Federal Reserve will increase rates from
about 0.15 to 1 percent by the end of 2010; the European
Central Bank, from 1 to 2 percent. Australia has already
increased rates to 3.75 percent and likely will increase rates
a further 100 basis points in 2010. Several developing
countries, including Brazil, China and India, likely will
increase rates.”

* “Most key credit spreads have returned to normal and
large businesses have access to credit. We expect credit
standards for consumers and small businesses will ease,
improving credit availability.”

* “Stimulus programs should have maximum impacts in the
first half of 2010. Some governments may expand programs to
provide additional support.”

* “We expect that world demand for most commodities will
increase this year, further tightening supplies. Our planning
assumes oil prices will average $83 per barrel, and copper
prices will average $3.20 per pound.”

* “Developing economies are growing again, and we expect
they will lead the economic recovery. Economic growth in the
developing world should be about 6 percent in 2010, up from 1.5
percent growth in 2009.”

* “We expect more than 10 percent growth in China and 8
percent growth in India. These high growth rates should
continue to improve construction spending and encourage
investment in mining capacity.”

* “Latin American economies recovered rapidly in the last
half of 2009, and we forecast regional growth of almost 4
percent in 2010. Ongoing recoveries in construction and mining
should continue.”

* “The economies of Africa/Middle East and CIS should grow
about 3.5 percent in 2010. Higher energy and metals prices
should encourage producers to increase investments and
production.”

* “Developed economies have performed poorly for several
years, and recoveries have been slower to develop. We expect
these economies will grow 2 percent in 2010, which will
maintain significant excess capacity and keep inflation
subdued.”

* “We forecast 3.5 percent growth in the U.S. economy,
which is slower than past recoveries from severe recessions.
Housing and mining production should improve from very
depressed levels in 2009. However, we expect continued decline
in nonresidential building construction, and delays in passing
a highway bill likely will cause highway contractors to remain
cautious about purchasing equipment.”

* “The European Central Bank appears to be reducing its
liquidity support, and bank lending remains weak. We expect
very modest recovery in 2010 — economic growth of about 1
percent. Construction surveys indicate spending should rebound
somewhat, particularly for infrastructure.”

* “The Bank of Japan has not been able to end deflation and
the associated weak economic growth. We do not expect any
policy improvements this year, and the Japanese economy should
grow only 1.5 percent in 2010.”

Investing Research

(Reporting by James B. Kelleher)

FACTBOX-Caterpillar’s 2010 predictions