Outlook for the Global Economy Past 2012
Almost all countries globally are experiencing bad effects from the global economic crisis. We’ve all witnessed how the whole world struggled with both the political and economic mayhem brought about. Over the past year, the economic developments have been interrupted by natural disasters such as the Tsunamis in Japan, revolts in the Middle East, and the Euro-zone debt. All these and many more factors have contributed to the slowdown in the improvement of the economy, as prices of commodities remain unpredictable and supply pathways have been disrupted. Looking forward to the end of 2012 and beyond, prospects for the global economy aren’t looking much better. Although the outlook is clear, the global economy still probably faces a very rocky road to recovery.
Despite the slowdown in the economy in the previous year, the past few months of 2012 have shown some positive results. However, there is still a heightened risk of downturn. One of the biggest threats to the economy is the European-sovereign debt. Over the next decade, it is expected that the global growth will slow down to an average of 3% annually. For 2012, the expected global economy growth is 3.5% and it is also expected to increase to 3.6% from 2013 to 2016.
In the United States, the unemployment rate will be persistently high and the wages will continue to be low. In Europe, the sovereign debt crisis will continue to weigh heavily on consumers as well as on business confidence in Europe. The debt problems in the Euro area as well as the declining growth of the big emerging economies will most likely affect numerous developing countries.
Developing countries on the other hand will be the ones who will strengthen economic growth as they are expected to grow by 5.4% in 2012 and then increase to 5.8% growth in 2013. China will have the highest expected growth when it comes to its contribution to the GDP, with growth of nearly 9%. China is followed by India, other developing economies, and other developing parts of Asia. The emerging markets include countries in East Asia and the Pacific, Middle East and North Africa, Central and Eastern Europe, and South Africa. Those with the lowest contributions to the global economy are countries that joined the European Union back in 2004. While the global economy is expected to somewhat increase by the end of 2012, it is expected that between the years 2013 and 2016 global outlook for growth will decrease and then further decline by around 2% between 2017 to 2025.
One of the greatest challenges that the global economy is about to face is how to raise efficiency without the loss of work opportunities, especially during this slow economic growth phase. All the problems that the economy is facing such as the Euro debt crisis, the turmoil in the Middle East, and many others may only imply further serious downturn.