In a twist to what has been the dominant growth trend in the post-recession period, the developing economies — India, China and others — are no longer spearheading global growth. The leadership role has been taken over by the advanced economies, with the U.S. at the helm. In 2014, both the developed and the developing economies are poised to grow, with the former providing momentum to the latter. Within the group of advanced economies, even Europe, battered by recession and weighed down by austerity measures, is showing signs of recovery. The World Bank report points out that the entire European Union, which includes the 17 countries that share the common currency, the euro as well as 11 others, which are outside the monetary union, reported a 1.5 per cent increase in factory output in November. The Bank expects the U.S. economy to grow by about 2.8 per cent in 2014, up from 1.8 per cent last year. Uncertainty arising from political differences among the two parties over the budget — that shut down the Federal Government — might be less of a problem this year. Japan has been jolted out of its slump by Abenomics, the aggressive fiscal and monetary stimulus associated with Prime Minister Shinzo Abe. As for developing countries, the Bank expects them to grow at a relatively modest pace of 5.3 per cent. That would be significantly lower than the heady growth that they enjoyed in the period before the recession.
Posted on: Mon, 27 Jan 2014 03:29:26 +0000
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