In April we read and studied the latest World Economy forecasts released by some organizations. Among them are the ones published by the International Monetary Fund (IFM) and the Economist Intelligence Unit (EIU). Both reports agree that the global economy is beginning to recover after the slowdown in 2012. Well, that is quite important, and it is probably the signal we were expecting after so many years of crisis. However, it is just the start and the figures are strongly different from a place to another.
Please, have a look at the attached picture (click for larger view). I took it from IFM outlook, and it clearly indentifies which, according to their forecast, will be the countries that will grow in 2013. The analysis is simple: red represents a growth under zero (decrease), while dark blue means a growth greater than or equal to 6%. All the other colors are between those two.
It is, at least, a bit disappointing that most red is in Europe. Projections for 2013 reveal a GDP decrease from 0.3% (IMF) to 0.7% (EIU). This bad performance is due basically to countries from the South such as Spain, Italy and France. European authorities should consider if the austerity policies applied in the recent years were as successful as expected. I doubt it.
On the other side, in terms of geography and economy, is Asia. The forecasts for that region are encouraging with a 5.7% average increase, IMF reveals. There is the big Chinese engine which during the last years has pumped increase into the World activity. That country’s GDP will grow an 8% in 2013. Fantastic!. It is normal that all our companies have their eyes focused on that place wanting to be “infected” by its vigor.
Finally, I would like to mention the U.S. It seems that they are in the middle: they are not decreasing but they won’t grow as heavily as Asia will (2.1% according to EIU, 1.9% according to IMF). The U.S. expansive policies revealed more effective for the recovery than the European ones. Two different ways to face the crisis with two different results.
Are we missing the growth train in Europe? Probably not, but we won’t travel in first class like we did until now, other countries took our seats. We need to monitor our Economy and our companies will need to look for the business in the countries where it is generated. Some years ago those countries could be next to ours, now those countries are far away. Let’s see how the year ends, and what we did to improve it…