emerging economies
(May 2013) US growth is set to accelerate in the second half of the year. Fears of a spring slowdown in the US are viewed as exaggerated. Weak initial jobs figures have been revised away, and the labour market in the US continues to improve. In fact, US employers created an average of 208,000 jobs a month between November and April, 50% more than in the previous six months. Meanwhile, China has now embarked on a permanently slower growth path.
(May 2013) Economic growth was strong in the 1960s in developed countries when debt was low; now when debt is high, growth is needed to bring down unemployment and to cut private and public debt burdens. However, economic growth in the 21st century has so far been lower than in previous decades while ageing populations will have a significant impact on growth over the coming decade. The contribution to growth from demographics is likely to halve over the next 20 years.
(May 2013) While BRIC countries would gain from various structural reforms, their growth potential remains substantial at lower levels than in recent times. All BRIC countries benefit from plenty of catch-up potential and scope to raise productivity via an increase in the physical and human capital stock. The first reason for optimism is that savings have not declined materially, and may even rise over the medium term. The current account positions are strong (China, Russia) or quite manageable (Brazil, India). This means that an acceleration of investment won’t be much constrained by a lack of savings.
(April 2013) The IMF says the average fiscal deficit of developed economies has fallen from a peak of 9% in 2009 to an expected level of 4.7% in 2013 and most countries were reducing their borrowing. However, 10 countries, amounting to 40% of global output, still had “the most severe fiscal problems,” including the US, Japan, UK, France, Italy and Spain.
(April 2013) The global economy is in a rut, unable to sustain a decent recovery and at risk of to a sudden stall, according to the latest Brookings Institution-Financial Times tracking index of recovery, published today. Last week, in a speech at the Economic Club of New York, Christine Lagarde, IMF managing director, spoke of a three-speed world economy and she called upon global policymakers to act to get ahead - - and stay ahead - - of the crisis.
(April 2013) Driven by strong domestic demand, economies of developing East Asia and Pacific continue to be an engine of global growth, growing at 7.5% in 2012 -- higher than any other region in the world. As the global economy recovers, regional growth is expected to rise moderately to 7.8% in 2013 and ease to 7.6% in 2014.
(April 2013) Chinese companies have come a long way in their quest to become multinationals. In 2005 the fast-growing Asian economy accounted for 5% of global GDP but only 1.3% of global outward direct investment (ODI) flows. In 2012 China accounted for 11.6% of global output and 6.7% of ODI - - so Chinese firms invest overseas less than those from other countries. However, the gap is closing quickly. Indeed, since ODI from China took off in 2005, annual outflows have grown at an average rate of 35% per year, reaching US$115bn in 2012. That has pushed China up the global ODI rankings from 16th place in 2011 to 3rd place (excluding tax havens), after the US and Japan. China is expected to be a net investor in the world economy by 2017 and the US, Singapore and Hong Kong are favourite markets for Chinese outward direct investment.
(April 2013) At 53.4 in March, little-changed from February's four month low of 53.2, the JPMorgan Global Services Business Activity Index - - a composite index produced by JPMorgan and Markit in association with ISM (US Institute for Supply Management) and IFPSM (International Federation of Purchasing and Supply Management) - - nonetheless signalled expansion for the forty fourth month in a row. March data pointed to a broad-based expansion of global service sector business activity. The US remained the strongest performer, recording growth above the global average for the fortieth successive month.
(April 2013) The Wall Street Journal says today that investment-led economic growth is slowing in China, making it tougher for global companies to make heady profits off big-ticket capital projects such as highways, airports and office parks. In search of new growth engines, Beijing is looking to Chinese consumers to help rebalance the country's economy. Analysts expect China's increasingly urbanised consumers will seek better lifestyles, eschew factory jobs and seek to own cars and homes - - pushing economic growth. Last year, around half of the country's 1.3bn people were city dwellers. That could jump to two-thirds by 2030 - - or by around 13m every year, according to the World Bank.
(April 2013) At 51.2 in March, up slightly from 50.9 in February, the JPMorgan Global Manufacturing PMI (Purchasing Managers' Index) - - a composite index produced by JPMorgan and Markit in association with ISM (US Institute for Supply Management) and IFPSM ( International Federation of Purchasing and Supply Management)- - signalled expansion for the third straight month.
