Tuesday, February 10, 2015

World economy: is growth too comfortable at just over 3%?

The world economy seems comfortable at just over 3% of real growth. It is not a robust growth, but it is what we get in these years even if the monetary policies are still very accommodatives around the world. It grew by 3.3% in 2013 and 2014. In their respective economic outlook, published last January, the IMF and the World Bank forecast a world GDP (at PPP) growth of around 3.5% this year. It would be just slightly better than in previous years, although leading indicators of the evolution of the economy let believe, for the moment, that growth in the coming months could be less than that.

The OECD monthly leading indicators, published February 9, let anticipate a stable but modest pace of growth in the coming months. The Purchasing Manager Indexes, published by Markit Economics earlier this month, point towards a world growth that goes from modest to moderate early in this year.

The G-20 Finance Ministers and Central Bank Governors, at their meeting in Istanbul on February 9 and 10, insist on their preference for a much stronger growth, but they have few concrete solutions, except their usual reform agenda, to offer in a context where risks and uncertainties are still quite high.

To be optimistic: nothing lets believe that the world economy could contract or show a sharp decline of its growth rate in the near future. Even the euro area could avoid such a scenario, although deflation is still at its door with its potential for economic turbulence.


Link to the OECD February 9 press release:

http://www.oecd.org/fr/std/indicateurs-avances/indicateurscompositesavancesdelocde-miseajourfevrier2015.htm

Link to Markit Economics February 4 press release:

http://www.markiteconomics.com/Survey/PressRelease.mvc/aa9e75bbcfac4fea8622b22632b5d42c

No comments:

Post a Comment