Troubled US, China And European Markets May Hit The Global Economy

Troubled US, China And European Markets May Hit The Global Economy

Finance ministers across the globe are set to meet in Tokyo to discuss on economic matters with a global perspective. These lawmakers are expected to have a heated debate on the issues that is pulling down the 3 major economies of the world, namely — US, China and Europe. There is a premonition that troubled local markets of these economies may have serious ripple effect on the global economy. Moreover, conflicting political interests in between the countries is worsening the problem.

The International Monetary Fund (IMF) updated its World Economic Outlook in which it said that developed countries may slip into another recession due to their failure to contain their home-grown socio-economic problems. The US has to come up with policies to resolves these financial problems or else it will pull down the weakened US and global economies, consequently halting the global economic growth engine.

Considering the most recent market data, the US economy grew up by 1.3% annual rate in the 2^ndquarter of 2012. In its forecast of the US markets, the IMF expects it to improve by 2.2% in this year and a paltry 2.1% the next (2013). Even employment opportunities continue to look very bleak this year with unemployment rate still at an all time high of 7.8%. Industrial production too is in shambles with companies slashing their budget in anticipation of a deflation and dwindling consumer demand.

The US federal government should come up with policies in order to defend its economy from an impending fall from the fiscal cliff due next year. Its policies should break the deadlock in its budget since without a proper working budget both increased taxations and austerity measures will turn futile.

Across the Atlantic, the economic statistics depict a gloomier picture with the whole European Union expected to drop by 0.4% in 2012 and register a petty growth of 0.2% in 2013, as declared by the IMF. Furthermore, it said that the worst performing European countries will not see any commendable improvement in its respective economies and will continue to suffer because of poor local economic growth. Unemployment rate in the whole of Europe currently stands at 11.4%.

Chinese markets have been slower than expected where its annual gross domestic product dropped to a 3-year lowly figure of 7.6% in the 2^itatnnd quarter of 2012. In its predictions for China, the IMF said that the Asian giant would clock a growth figure of 7.8% by the end of this financial year. Slowed Chinese economic expansions have hurt its local manufacturing sector very hard.

By Allen Rey, financial guest writer.

Posted by Allen Rey on Tuesday November 13 2012, 5:03 AM EST. All trademarks acknowledged. Filed under Featured News, Finance, Original. Comments and Trackbacks closed. Follow responses: RSS 2.0