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Enhanced Global Economic Prospects for 2014 and 2015

Enhanced Global Economic Prospects for 2014 and 2015
May 07
13:55 2014

The new order shifts the economic focus to Asia from the West. Economic states of affairs do sometimes change dramatically. The times are indeed changing with China poised to surpass America as the world’s largest economy very soon. America overtook England to hold that status as the economic superpower as far back as 1872 and there has been no looking back.

What has been happening recently? The recession of course in 2008 but 5 years of recovery have elapsed since then. The Chinese economy grew 24% from 2011 to 2014 while the American economy expanded a mere 7.6%. With China overtaking America, India would become the third largest economy with its economy reaching 37% of America in 2011. India was in the tenth place not so long ago! Indonesia and Mexico along with Russia and Brazil now make it to the top 12 while England and Japan have receded lower than America.

Yet faster growth in developing countries is reducing the rich poor divide and bringing in greater equality. The developed countries while having only 17% of the world population account for 50% of the world GDP! Surprises would never cease and ironies would remain to haunt leaders and statisticians as the conscience of the world remains a thing of mystery.

Elsewhere, what are the emerging economic scenarios of the future? Overall, the global situation is on an upward trajectory with the euro group having moved out of recession. Developing countries are doing better since the richer countries are getting steady and China is becoming stronger too. Though per capita income may be declining in developing countries, growth is expected above 5% in 2014. Some countries would go beyond that with Angola at 8% and India at 6.2%.

Europe and Central Asia

Generally the outlook is favorable with some growth expected during 2014-2016. Central and Eastern Europe countries are expected to do better financially. The commonwealth of independent states is expected to do well along with the general global recovery. Oil prices would remain stable in 2014 but may decline a little in 2015 and 2016.

Growth returned to the euro region in latter 2013. Turkey improved with better domestic demand to 4.3% in 2013. Energy producing economies have been stabilizing in Azerbaijan, Kazakhstan, and Uzbekistan. Banking remains weak across the region in countries like Albania, Bulgaria and Kazakhstan because of weak loans.

On the other hand, slow growth in China and Russia could impact global growth. Countries like Armenia and Tajikistan that heavily depend upon Russia would suffer. The American financial narrowing would adversely affect weak banking sectors with difficult global conditions.

Middle East and North Africa

Economies suffered depression three years after the incidence of the Arab Spring. Egypt and Syria suffered political turmoil which impacted neighboring countries like Lebanon. Further social and economic conditions could get worse as a result of political turmoil and the war situation. Tourism has suffered grossly and oil production activity has marginally suffered too.

Oil production reduced by 8.5% during the past year as a result of strikes and infrastructure problems in Iraq, Libya and Algeria. Iran suffered international sanctions.


Latin America and the Caribbean

The region witnessed mellow trade in 2013 as a result of domestic problems and difficult commodity markets. Exports in merchandise were weak. Agricultural product prices reduced as did metal prices, both base and precious metals. Regional currencies depreciated and industrial activity reduced.

Enhanced Global Economic Prospects for 2014 and 2015 - overview
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Articles on the Jadenforex blog written by "Jadenforex" include guest posts, and items written in collaboration with several authors.

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