29 Nisan 2015 Çarşamba

Holistic approach for global growth


As long as incoherent approach continues for the global problems, the expected growth would not be achieved. The pre-crisis performance could not be still achieved in the global growth; despite nearly 8 years have passed over the global financial crisis.  

According to the IMF, output across advanced and emerging market economies remains much lower than was expected in 2008, just before the onset of the global financial crisis and its growth path has also been lower.

The IMF also highlighted medium-term (five-year ahead) growth expectations have been steadily revised downward since 2011 for both advanced and emerging market economies.

The repeated downward revisions to medium-term growth forecasts underscored the uncertainties surrounding prospects for the growth rate of potential output.

As for the another point in terms of the growth is that in advanced economies the apparent decline in potential growth seems to have started as far back as the early 2000s and this situation was worsened by the crisis.

Looking forward potential growth in advanced economies is predicted to increase slightly from an average of about 1.3 percent between the years 2008-14 to 1.6 percent between the years 2015-20.

Despite this, growth is seen well below pre-crisis rates (2.25 percent during 2001-07) and stems from the negative effect of demographic factors on potential employment growth and the gradual increase in capital growth from current rates as output and investment recover from the crisis.

Meanwhile, in emerging market economies, potential growth is forecasted to decline further, from an average of about 6.5 the years between 2008-14 to 5.2 percent for the years between 2015-20.

Fluctuations in oil prices are continuing. Nevertheless expectations from low oil prices would boost the global growth.

The IMF’s projection for global growth in 2015-2016 would stand at 3.5 and 3.7 percent.

While the IMF predicts the global economy would grow 3.5-3.7 percent in 2015-2016; as for the monthly oil market report of OPEC, the global growth would remain 3.4 percent in 2015 and 3.3 percent in 2016.

Finally, the related global organizations struggle to let growth to get acceleration and for this they suggest caring innovation, jobs and real income of the middle-class, poverty reduction and greater economic fairness. However implementing these suggestions would not be possible.

The current world conjuncture has a crucial role in foreseeable and expected global growth, without recovery in this ailing global condition to realize targets seemingly difficult.

Uprising and terrorist actions mostly has been experienced in recent years in particular in MENA, the Middle East and North Africa region because of lasting solution could not have been found. The said events have a vital effect in the global growth. For this reason, unless a holistic approach is set up for the global challenges, being successful in the expected global growth might not be realistic.