Investors are increasingly bullish about prospects for global growth and a diminishing number expect further rounds of quantitative easing (QE) by central banks, according to the BofA Merrill Lynch Survey of Fund Managers for March.

A net 28 percent of investors expect the world economy to strengthen in the coming 12 months – a large increase from a net 11 percent in February. As recently as January, the majority of respondents predicted that the economy would weaken.

This month sees an even split between those expecting a stronger or weaker eurozone economy. In February, a net 35 percent predicted the economy would deteriorate.

Investors are more optimistic about corporate profits. A net 6 percent of the panel expects corporate profits to improve in the coming year. A month ago, a net 11 percent predicted profits would decline.

Fewer investors expect the U.S. Federal Reserve (Fed) to engage in further QE. Nearly half of the panel (47 percent) expects no further QE in the U.S., up from 36 percent in February. Thirty-nine percent predicts the European Central Bank will not extend QE, up from 23 percent a month ago. However, investors foresee higher inflation with a net 13 percent expecting it to rise in the coming year. Only last month, a net 16 percent predicted inflation would fall.

“The prospect of higher inflation reflects a victory of central banks in the war against deflation. Risk appetite is rising with hedge funds more active, but cash is still on the sidelines to put to work,” said Michael Hartnett, chief Global Equity strategist at BofA Merrill Lynch Global Research. “We are witnessing a rehabilitation of European growth prospects, boosted by a sharp fall in EU sovereign concerns,” said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research.