After nearly four years of economic turmoil, the global economy in 2013, comparatively at least, appears to be now reaching a period of relative calm.
The U.S. has somehow managed to avoid the fiscal cliff at the start of the year, the tail risks of a Greek exit from the Eurozone or a massive loss of market access in Italy and Spain have been drastically reduced, China for better or worse will undergo an economic rebalancing, while even the so-called “harbingers of doom” – the banks that caused the financial crisis in the first place – have been either saved or somewhat reined in, with greater fiscal responsibility and regulations placed on these financial institutions.
The world economy, it seems, will be able to muddle through for the next year at least.
Now for the bad news.
As leaders worldwide continue to kick the proverbial can of problems down the road, more dirt is likely to be picked up along the way. Much of the fate of the global economy is now in the hands of politicians and central bankers – and we of course all know how much they can be trusted to swiftly deal with any economic problems, don’t we?
At EconomyWatch.com, we welcome the optimism and relief to the markets that the New Year has brought, but we remain wary of the risks ahead, especially as we now embark on an era of even more divisive politics and policies worldwide, which will not push the economy into turmoil in the short-term, but equally will not put us on the road to sustainable recovery.
But before we take a look at the issues, let’s take a look at the economic forecast for the year, taken as ever from our Economic Statistics Database.
World Economic Statistics at a Glance - 2013 Forecast
World GDP (current prices): $74.171 trillion
World GDP (PPP): $87.209 trillion
GDP Growth Rate: 3.152%
GDP Per Capita (PPP): $12,400
GDP By Sector: Services 63.9%, Industry 30.
Growth In Trade Volume: 4.48%
Industrial Production Growth Rate: 3.9%
Population: 7.095 billion
Population Growth Rate: 1.096%
Urban Population: 50.5%
Urbanization Rate: 1.85% (125 million people move to cities every year)
The Poor (Income below $1.25 per day): Approx 1.49 billion (~ 21%)
Millionaires: Approx 11.0 million (~ 0.15%)
Labour Force: 3.305 billion
Inflation Rate – World Average: 4%
Inflation Rate - Developed Countries: 2.2%
Inflation Rate - Developing Countries: 5.3%
Unemployment Rate: 9.2%
Investment (gross fixed): 24.1% of GDP
Public Debt: 64% of GDP
Market Value of Publicly Traded Companies: $47.04 trillion, or 63.5% of World GDP
Sources: EconomyWatch.com Economic Statistics Database, CIA World Factbook, IMF, World Bank
The World Economy in 2012 was worth $83.140 trillion in GDP terms, using the Purchasing Price Parity (PPP) method of valuation. This is expected to grow to $87.209 trillion in 2013.
Ever since the international financial crisis of 2008-09 led to the first downturn in global output since 1946, economies around the world have adopted a mix of fiscal and monetary policies to restore growth and jobs, while keeping inflation and debt under control.
From monetary easing (conducted by central banks) to fiscal consolidation (a.k.a. austerity), governments have had to confront the difficult task of spurring current growth and employment without saddling their economies with so much debt that they sacrifice long-term growth and financial stability.
The IMF now sees the world going through a “three-speed recovery” process, as emerging markets continue to go strong, while a growing split appears to be developing between the policies and growth prospects among the advanced economies – most notably, the United States and the euro area.
Beyond the economic slowdown, the world also faces several long-standing economic challenges. Having reached the “magical” 7 billion mark in population in 2011, the world is facing an overcrowding issue - exacerbating the problems of pollution, waste-disposal, epidemics, water-shortages, famine, over-fishing of oceans, deforestation, desertification, and depletion of non-renewable resources.
Yet advances in technology have also begun to show signs of being able to deal with some these problems, with progress being achieved in agriculture, medicine, alternative energy, metallurgy, transportation and communications.
In order for you, our readers, to gain a greater appreciation of the issues, we at EconomyWatch.com have complied a *top-three list of articles and viewpoints published on our site (and broken down into categories) to keep you informed on the world’s global prospects.
Keep coming back on to page for regular updates or head to our Features Section for a broader perspective. Additionally, you can also read up on Country profiles or check out our Economic Statistics Database.
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