LUXEMBOURG, May 5 (Reuters) - The continued global economic expansion offers an "extraordinary window of opportunity" for investors, particularly in European markets that haven't yet fully priced in the positive outlook, Blackrock vice chairman Philipp Hildebrand said on Friday.
Investors are underestimating the positive impact of the synchronised reflation trend that is helping to lift global asset prices, he said, noting that Europe is also benefiting from substantial European Central Bank stimulus.
"Europe has more upside potential than perhaps any other region in the world today," Hildebrand told delegates at the International Capital Markets Association annual general meeting in Luxembourg.
"Growth has returned and deflation risks have successfully been fought off. It's an extraordinary window of opportunity."
The euro zone economy grew nearly three times faster than the U.S. economy in the first quarter, and consumer and business confidence is surging. Earnings growth is in double-digits and corporate deal-making is near record levels.
European equity funds are poised to recoup the $100 billion of investor flows that left the region last year, analysts say.
Hildebrand said investors tend to underestimate the strength of synchronised inflation and growth trends, both on the upside and the downside.
He said he is hopeful that U.S. capital expenditure and productivity are finally turning the corner after years of sluggish performance - "two missing pieces" that would cement the U.S. recovery and the same globally.
That said, investors shouldn't get carried away, said Hildebrand, vice chairman of the world's asset manager.
Debt levels globally are higher today than they were before the financial crisis, ageing populations are putting a huge strain on government finances in the developed world, and productivity growth in most advanced economies remains weak.
"Add all that together ... and it's hard to see a return to the golden days before the crisis," he said. (Reporting by Jamie McGeever; editing by Mark Heinrich)