2015-2019 GLOBAL ECONOMIC RECOVE RD REMAINS Despite indications of recovery, the global economy remains in a fragile state. While growth is strongest in developing countries, it is still slower than during the pre-crisis period. A cautious attitude and ongoing aversion to risk mean that business confidence is tepid – especially in the EU, which has borne the brunt of this disruption.* There is continued political and social unrest in the southern European countries of Portugal, Italy, Greece and Spain, where debt continues to spiral.* After reaching a plateau in 2008, global trade is showing improvement now, but is still trending at or below the average for the previous few decades. Unemployment remains high in Europe (12%), which consumes one-third of the worlds traded goods* and where austerity measures have persisted.* Although it is undertaking reforms like the Single Supervisory Mechanism,* Europes banking system has yet to be fully repaired. The US is seeing faster growth than Europe, but remains in a fiscal deadlock over its debt ceiling, with periodic brinkmanship between Democrats and Republicans,* now more polarised than ever before.* Although the annual budget deficit has fallen significantly,* it will soon begin rising again* – due to pressures of an aging population, rising healthcare costs, expansion of federal subsidies for health insurance, and growing interest payments on national debt, the latter still alarmingly high at over 70% of GDP and set to reach 100% by the 2030s.* Chinas annual growth rate, while high compared to most countries, has been slowing in recent years* – due to a combination of local government debt, environmental issues, overcapacity and structural imbalances.* Demographic challenges have emerged from its aging population and declining workforce. The resulting labour shortages are driving up wages, reducing the competitiveness of its exports.* This demographic trend is even more of a problem for neighbouring Japan.* Emerging OECD members that are faring much better include Chile, Israel, Mexico, South Korea and Turkey.* Overall, the global economy is recovering, but frustratingly slowly compared to previous such crises. Some of the most rapidly growing industries now include agriculture,* alternative energy,* biotechnology,* computer systems design, e-commerce, healthcare, mining* and scientific/technical consulting.*
Posted on: Wed, 03 Dec 2014 03:15:30 +0000
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