Over the past years, the world economy is growing steadily, with strong and fairly broad-based recovery. Resulting in an acceleration of economic activity in developed countries by the recovery in investment.
There are emergent signs which shows might global growth has reached its peak. Where on one hand global indicators are expanding less vigorously and on other hand country-level indicator signal softening activity at many parts of the world, along with increased uncertainty and downside risks. As mentioned by Damon Vickers consumer and business show a positive image of the current location.
He stated that worsening of expectations concerns two areas – international trade tension and financial market stress. Though the post-financial crisis, economic boom still seems well set on becoming the longest expansion in many countries.
Whereas it is believed by Damon Vickers that global data crackers, namely International Monetary Fund and Organisation for Economic Cooperation and Development, are less optimistic about ongoing growth in the rest of the world.
There are several factors posing threat to this further economic growth and those causes underline the tightening of financial condition on a global scale and lower state revenue due to weaker growth poses the big threat to the growth.
As per the recent studies, the global economy is growing faster than global production and income, which is totally in contrast with the previous time period where the elasticity of trade with respect to the output was much lower.
The report of Global growth for 2018 shows that global expansion has weakened. Risks to global growth tilts to the downside.
The global growth in 2018 was estimated to be 3.7%, to be the last fall but the slowdown in second half of 2018 led to downward revision for several economies. This growth pattern reflects a persistent decline in the growth rate of advanced economies from above trend levels.
The financial conditions in emerging markets have tightened modestly since the fall, with notable differentiation based on country specific factors.
Moving to talk about global economy of 2018, it had darkened. To against this challenging backdrop, grow in emerging market and developing economies is expected to remain flat. Growth in many other economies is anticipated to deliberate. In addition, risk are growing that growth could be even weaker than anticipated.
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Damon Vickers: According to the reports and as per the analysis of World Bank Chief Executive Officer, Kristalina Georgia said, “ At the beginning of 2018 the global economy was firing on all cylinders but it lost speed during the years and ride could get even bumpier in the year ahead. As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized. To keep the momentum, countries need to invest in people, foster inclusive growth and build resilient societies.”