Hope on the horizon – the latest on the global economic outlook
After years of pain in the wake of the 2008 global financial crisis, there’s hope on the horizon. But serious geopolitical crises, such as those in the Middle East and in the Ukraine, are threatening to dim what could be the light at the end of the tunnel.
The global economy looks set to expand modestly over the short term, as growth is projected to rise from 2.8% in 2014 to 3.7% in 2016 according to IHS Global Insight, which is welcome news for those still feeling the impact from the financial crisis.
So which countries are thriving, surviving, or slipping backwards?
Head of the class – India and China
Drilling down into the research contained in the latest Global Talent Market Quarterly, it’s clear that the emerging economic powerhouses of India and China remain the leaders in terms of real GDP growth. Asia’s outlook suggests continuing solid expansion, despite slowdowns in China and Japan. However, the countries’ economic outlook is mitigated by China’s weak housing market and India’s slower growth in recent years.
South America lags: Americas
There is hope across North America as modest growth in 2014 is expected to accelerate across the medium term, while the neighboring South America region is being dragged down by Brazil’s slowdowns and recessions in Argentina and Venezuela.
It’s complicated – Europe, Africa and the Middle East
The economic outlook is more challenging in the EMEA region; the recovery in the Eurozone is advancing precariously, though countries like the UK and Germany are leading the region’s growth. Eastern Europe is getting a lift from the recovery in some parts of the Eurozone, but the Russian conflict brings the risk of disruptions. Ongoing tensions in the Middle East are also threatening regional growth prospects.
Selected Markets, Ranked by 2014 Real GDP Projected Growth Rates
3. United Kingdom
Emerging markets, once the powerhouse of the global economy, continue to weather difficulties and many will need to implement structural reforms in order to return to stronger growth.
- China – economic growth is slowing, but has stabilized in response to recent stimulus measures. Risks include a weak housing market and the limited nature of the stimulus.
- India – despite slower growth in recent years, the new government has an opportunity to implement reforms and jump-start an economic revival.
- Russia – the economy slowed at the start of 2014, because of sluggish consumption and investment activity. Sanctions and other challenges as a result of the regional military conflicts threaten an already weak environment.
- Brazil – despite sluggish projected 2014 growth of just over 1% because of declining investment and modest consumption, acceleration is predicted for 2015.
Moderate growth is predicted for most developed economies, as the European recovery takes hold and the US expansion gains momentum.
- US – moderate growth is projected for 2014, though there is a more robust outlook in 2015-2016
- Canada – decent growth of about 2% in expected in 2014
- The UK is one of the strongest-growing major economies, while in Germany underlying growth momentum has strengthened to a pace of about 2%. Other healthy European economies include Ireland and Sweden.
- France, Spain, Italy, Portugal, Greece – growth lagging as the recovery struggles to gain momentum.
- Japan – the economy is expected to slow somewhat after the spring sales tax rise, but stimulus and export recovery are projected to drive moderate growth of 1.4% in 2014.
- Australia- a stronger first quarter set a decent pace for the Australian economy in 2014, but the continued projected mining investment slowdown is set to keep growth in check.
While the global economy is on the road to recovery, there may be some roadblocks before a return to boom conditions.
For more, download the Global Talent Market Quarterly report here.