GLOBAL ECONOMY
P.14
INTERNATIONAL ROUND-UP
The global outlook for 2014
United States of America
Global Outlook
Raam Jeganathan
2014 began with a series
of economic events such as
the IMF forecasts and World
Economic Forum in Davos.
Overall, 2014 can be seen as
the year of recovery for the
global economy. Many of the
developed countries who
The US Federal Reserve
recently withdrew its economic stimulus measures,
and due to the importance of
the USA in the global economy, any change in their policy can have a huge impact
around the world . Their
withdrawal creates a risky
situation with there a possibility that global interest
rates could rise, leading to
volatile global financial mar-
were hit hard by the financial
crisis of 2008 seem to be
steaming ahead on the road
to recovery. In concordance
with the high flying growth of
developing economies, despite a slowdown, the year
could spark potentially significant
growth,
something
which disappeared following
the crisis.
However,
with
many
economies looking to rebalance their economy and
kets. The bond buying programme (QE) had been begun by the government to
inject life into the extremely
fragile economy following
the financial crisis of 2008.
However, confidence has
returned to the markets,
consumption and investment
levels have risen, which has
resulted in the economy relying less on government
interventionist policies support the economy.
The latest growth figures
from the USA showed that
the nation had 3.2% growth
in the final quarter of 2013,
with 2014 predicted to bring
pre-recession growth back
pay down debt, growth is not
expected to be smooth. IMF
managing director, Christine
Lagard, has warned of the
imminent threat of deflation;
something Japan finally escaped
from
after a lengthy
battle. Global
GDP is expected to grow
at 3.2% whilst
developing
nations will see themselves
grow at 5.3%.
to the economy. This is a
massive improvement considering growth was only at
0.8% at the same point 12
months before. Over this
time, unemployment fell to a
five year low of 6.7% however the government's job creation rate slowed down with
only 74,000 created in December. This is far below
the average rate of 214,000
per month. The trade deficit
fell by 12.9%, the highest
monthly amount since October 2009. This was mainly
boosted by the rise in the
production of shale gas, reducing the need to import
energy from abroad.