Economic crisis continues to exist

 

Of course there are many crucial issues have been waiting for solution on the agenda, such as unrest in Syria that exceeded 20 months, Muslim population whose homes have been fired and obliged to exile from their own territories in Myanmar and so on across the world.

In addition, another crucial issue that has been on the top of the agenda is the global economic crisis persists its weight across the world since 2007 – 2008.

The observers commented that global economy has experienced a continuous deceleration since the beginning of the year.

Despite the prevailing weakness in the world economy, the slowing momentum is expected to reach the low point later this year. It is forecast that a slowdown in the manufacturing sector might fertilize through the rest of the economy and affect employment.

Regarding downward tendency, global growth was revised to 3.1 percent from 3.5 percent at the beginning of this year for 2012.

The growth is forecast to accelerate somewhat to 3.6 percent from 2013-2016, and then show a further slowdown to 2.7 percent from 2017-2025.

In 2013, the global growth is projected to be slightly higher at 3.2%, compared to a downwardly adjusted performance of 3.1% for this year.

The US economy is regarded to show a relatively better performance than the other major developed economies, although growth is expected to slow from 2.2% for this year to 2.0% in 2013.

One of emerging economies, China which spearheads the world economy is predicted to expand by 7.6% in 2012 and 8.0% in the coming year. As for India, it is forecast to grow by 5.7% this year and 6.6% in 2013.

The EU and the US are China’s two largest export markets, it is foreseen weak demand in these two major regions will continue to weigh on the growth prospects of the export sector and the economy as a whole.

Growth for the Euro-zone is expected to be 0.1% in 2013, following a contraction of 0.5% this year.

Emerging Asian economy has become increasingly dependent on the Chinese economy and a slowdown in China’s growth would deteriorate prospects for economic growth in the emerging markets of the region, according to the analysts.

Following the slowdown in the Latin American region in 2011, a further slowdown is expected for this region in 2012, in a context of Euro-zone contraction.

As for the Middle East and North Africa Economic growth, it would be constrained in 2012 by weak economic growth in some countries.

In North Africa, exports of goods and services (tourism, in particular) will be constrained by weak demand in Europe.

Regional growth will pick up slightly in 2013, boosted by massive ongoing infrastructure development programmes in Saudi Arabia and other oil exporting countries of the region.

OPEC forecasts stronger economic growth in the 2H13 as hydrocarbons output continues to rise, oil prices stabilize at a high nominal level and some of the large infrastructure projects in the region start to come on-stream.

Euro area is regarded as the starting point of the economic crisis, thereby it is cited the need to restore confidence to euro area by completing its duties and assignments such as reducing of government debts and deficits in a way that supports growth; implementation of structural reforms and clean-up of the banking sector.

Seemingly recession in the global economy might maintain its effects.

The key question might be how policymakers will manage the automatic budget cuts that would be implemented in the next year.

It is assumed that a compromise will be found and that the budget cuts would be alleviated and spread over the coming years, accordingly the negative growth impact will be limited.