Although the global economy made progress on some fronts in 2014—inflation was tame and incomes rose in most places, for example—gross domestic product (GDP) growth remained subpar.
In "As the World Turns (Sluggishly)," Regional Economic Information Network director Galina Alexeenko notes that robust growth prospects are still largely elusive in many economies, and downside risks to the current moderately optimistic outlook have increased. The article is featured in the September–December issue of EconSouth.
Economic fortunes vary
Among developed economies, the euro zone seems most vulnerable, Alexeenko says. The region's three largest economies—Italy, Germany, and France—saw their economic performance worsen to varying degrees in 2014.
As for emerging economies, China's situation was a key component of the global picture. Although GDP growth remained consistent with that government's target of around 7.5 percent, growth moderated from the booming 9 percent annual rates of growth seen over the past decade.
Looking ahead
The major trends in the global economy aren't likely to change much from 2014 to 2015, according to Alexeenko. Overall, the expectation is that global growth will accelerate only slightly, with the United States and United Kingdom leading growth among developed economies, both buoyed by stronger consumer spending and business investment. However, emerging markets are expected to account for the largest share of GDP growth, she says.
The article notes a number of downside risks that could derail this slightly positive outlook for 2015, including continued weakness in the euro zone, a possible hard landing in China, and the expected tightening of monetary policy in the United States.
Read more about the global economic outlook in "As the World Turns (Sluggishly)," featured in the latest issue of EconSouth.