Economists: No global collapse in '08

NEW YORK (CNNMoney.com) -- Even though the battered housing market and credit crisis have created turmoil in financial markets, economists expect global growth to slow rather than collapse next year, according to a report released Monday.

The global economy has shown resilience to the strains in the core of the financial system, which has intensified in recent weeks, Citigroup's (Charts, Fortune 500) Economic and Market Analysis group said.

The forecast "reflects the judgment that the current stresses from the U.S. housing sector, high oil prices, a weak U.S. dollar and the recent financial turmoil will not overwhelm the global economy," Lewis Alexander, chief economist and head of economic and market analysis at Citi, wrote in the report.

But, the level of uncertainty around the outlook is "unusually high," he added.

The group's annual report detailed its outlook on the markets and economy, as well as its view on monetary policy, the pricing of risk and emerging market economies' vulnerability to external shocks.

Strong productivity growth, solid household finances and a lack of imbalances outside of the housing sector should benefit the U.S. economy, the report said. Non-financial firms have high profit margins and strong balance sheets, it added.

Europe's economy also shows signs of resilience, despite the widening fallout of the ongoing credit crisis. The report said emerging markets should remain robust next year, driven by growth in most of Asia.

Citi economists also expect many major central banks to ease policy in the coming months, including another interest rate cut of 100 basis points from the Federal Reserve.

"We do not expect either inflation or concerns about 'moral hazard' to prevent major central banks from easing and this will help to limit downside risks," Alexander wrote.