Amid growing fears about Greece and the prospects for the global economy, institutional investors are increasingly looking for governments to ramp up the stimulus once again.

The latest BofA Merrill Lynch Survey of Fund Managers for May finds that a growing majority of global investors would like to see more stimulative fiscal policies. The proportion of global investors saying global fiscal policy is “too restrictive” has more than doubled to a net 23% from a net 11% in April, the firm reports.

The survey, which took place from May 4 to 10, after elections in France and Greece, found that nearly two-thirds of investors are concerned that Greece will be the source of a negative surprise this year, up sharply from 48% in April.

Fewer investors are convinced that current monetary policy offers enough stimulus, Merrill notes, adding that expectations of additional stimulus from the European Central Bank are rising. Now, 60% of respondents expect the ECB to engage in more direct large-scale quantitative easing by the end of 2012 – up from 51% in April.

This growing clamour for more stimulus comes as expectations of economic growth have fallen further, and as concerns about inflation have eased significantly, Merrill says. It reports that only a net 15% of the panel expects the global economy to strengthen in the year ahead, down from 28% in February. The proportion of investors predicting inflation to rise in the coming year fell to a net 2% from a net 21% in April.

“Investors have eradicated hopes of growth and inflation that had built up in the early months of the year – and they are looking to policy makers for stimulus,” said Gary Baker, head of European equities strategy at BofA Merrill Lynch Global Research.

In the meantime, asset allocators are increasing positions in cash and bonds while reducing exposure to equities, it finds. A net 28% are now overweight cash, up from 24% in April, and the net underweight in bonds has fallen to 33% from 48% a month ago. The proportion of asset allocators overweight equities is also down to a net 16% from 28%.

Additionally, the appetite for commodities is down to its lowest level in seven months, Merrill says. A net 2% of the panel is now underweight commodities, compared with an 8% overweight in April.

One bright spot is China, where investor hopes have continued to rise. Merrill says that a net 10% of the panel expects a stronger Chinese economy in the next 12 months, up from 4% a month ago. And, a net 32% of global investors say global emerging markets is the region they most want to overweight, up from 24%.

An overall total of 234 panelists, with US$526 billion of assets under management, participated in the survey.