Word Economy by Christos Makrides, Christos Makrides & Associates Ltd
The international Monetary Fund’s latest Word Economic Outlook Update (WEO Update – January 2013) reports that the word economy grew at rate of 3.0% in the third quarter of 2012, with economic conditions improving modestly, mainly aided by emerging market economies where activity picked up. Global financial conditions improved further in the fourth quarter of 2012, however indicators suggest that global growth did not.
The IMF reports that the policy actions have lowered acute crisis risks in the euro area and the United States, but in the euro area, the return to recovery, after a protracted contraction is delayed. At the same time, policies have supported a modest growth pickup in some emerging market economies, although others continue to struggle with weak demand and domestic bottlenecks.
In a case crisis risks do not materialize and financial conditions continue to improve, global growth may well be stronger than projected, the IMF reports. However, it is stressed that down-side remain significant, including renewed setbacks in the euro area and risks of excessive near- term fiscal consolidation in the United States. The IMF estimates that the word economy has grown by 3.2%in 2012, while it projects that the word GDP is to grow by 3.5% in 2013, and by 4.1% in 2014.
For the United States, GDP growth reached 2.3% in 2012, while it is forecast to average 2% in 2013 rising above trend in the second half of the year. For 2014 GDP growth for the U.S economy is projected at 3.0%. In the euro area, progress in national adjustment and a strengthened EU – wide policy respond to the euro area crisis seem to have reduced tail risk and improved financial conditions for sovereigns in the periphery. Thus, while a GDP contractions of -0.4% is estimated to have been register in 2012, activity in positive territory in 2014 (GDP growth of +1.0%)
GDP %
Consumer Price Index(%)1
Unemployment (%)2
2012
2013
2012
2013
2012
2013
World Economy
3,2
3,5
USA
2,3
2
2
1,8
8,2
8,1
Euroarea
-0,4
-0,2
2,3
1,6
11,2
11,5
Germany
0,9
0,6
2,2
1,9
5,2
5,3
France
0,2
0,3
1,9
1
10,1
10,5
Italy
-2,1
-1
3
1,8
10,6
11,1
Spain
-1,4
-1,5
2,4
2,4
24,9
25,1
United Kingdom
-0,2
1
2,7
1,9
8,1
8,1
Russia
3,6
3,7
5,1
6,6
6
6
China
7,8
8,2
3
3
4,1
4,1
India
4,5
5,9
10,2
9,6
–
–
Greece
-6,4
-4,4
1
-0,8
24,7
27
Cyprus
-2,3
-3,5
3,1
1,5
12,1
13,7
