Economic Growth and Recovery

Organization for Economic Cooperation and Development released the first comprehensive index of economic reports that members of the Organization in May leading index increased by only 0.1 point chain is consecutive months since the second half last year, an increase of reduction. Most developed countries, the economic development cycle at or near peak, but the original number of developing countries to promote economic recovery has slowed down the pace of development. This means that for some time, the world's major economies may face recovery is weak, the growth rate down situation.

Resulting slowdown in the pace of recovery in developed economies the main factors are: the United States, financial market turmoil intensified emotional reluctance to lend financial institutions is still high unemployment rate affects the consumer confidence index rose another stock-oriented enterprise completed investment in fixed assets continued to restrict the growth in the euro zone economic growth of the drop impact on U.S. export growth; on the euro area, the sovereign debt crisis severely weakened the Southern European countries, the growth momentum, while the relevant state fiscal austerity program launched to some extent undermined the long-term growth prospects, the potential losses faced by financial institutions also hinders their support on the real economic growth.

The OECD report also noted that some emerging economies, the future economic growth will also decline. European economic growth slowing, decline in import demand could lead to the implementation of export-oriented strategy for India and other countries, exports fell, and the resource-exporting countries, Brazil, Russia and other countries export declined.

Despite the world economic growth in 2010 in the second half and first half of 2011 declined, but the world economy "second bottom," or unlikely to return to recession. According to the International Monetary Fund in July 2010 to the latest forecast, the first half of 2010 economic growth rate of developed countries, 3% in the second half will drop to 2%, annual 2.6% in 2011 and further dropped to 2.4% in the year; emerging market and developing countries in 2010 and 2011, economic growth will reach 6.8% and 6.4%; the world economy in 2010 and 2011, growth rates were 4.6% and 4.3%. Compared with 2009, -0.6%, 4% of world economic growth in any case is not really a "second bottom."

"Second bottom," the risk of not much, but the world economic growth and financial stability risks are rising. European Union and the International Monetary Fund launched an unprecedented 750 billion euros rescue package, but the European sovereign debt crisis is still expanding and spreading. Following Greece, Portugal, Spain, Ireland, Italy, Britain under pressure. Vast holdings of government bonds in Europe, these countries and whether the U.S. financial involvement will be re-Wei Ji, led to the crisis passed again by a sovereign area of debt to private financial Bumen? Fiscal austerity plan is just mean Greece debtor will default risk temporarily postponed, after 2012 had to face the dilemma of a lot of maturity of the debt default? Once these uncertainties should misconduct, will evolve into a real threat to the world economy.

Although the second half of this year growth will fall, but the world economy is still recovering, "second bottom" is unlikely. However, it should pay attention to sovereign debt risk, balance sheet risk and contraction risk. How to maintain appropriate growth in the premise of the implementation of structural adjustment, is the world's economy facing serious challenges.

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