Megatrends
The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
Learn MoreAs we reach the halfway point of the year it’s a good time to take stock. So far in 2012 we have continued to see a mixed economic picture with risks mainly on the downside. In fact as the year progresses news appears to be getting bleaker and risks becoming ever more heightened. As we predicted when the financial crisis hit in 2008, the recovery, in common with most recoveries following financial crises, is proving to be long and arduous.
In the first six months of the year the world has been mired in another period of great economic uncertainty. The eurozone crisis is casting a shadow over economic growth. We are currently estimating global real GDP growth to fall to 3.2% in 2012, down from 3.8% in 2011;
So far 23 of the EU-27 countries have released GDP estimates for the first quarter of this year. Of these 23, eight are in recession (Czech Republic, Spain, Italy, Cyprus, Netherlands, Portugal, Romania, and the UK).
Advanced economies are on the whole expected to see stronger growth in the second half of this year, than has been seen so far. The USA and Japan are growing at a faster pace than Europe:
Source: Euromonitor International from national statistics/Eurostat
Note: Data are seasonally adjusted
Emerging economies continue to lead global economic growth. In 2012 growth is expected to be strong, but weaker than in recent years and as well as the impact of the eurozone crisis, many policy challenges remain:
Source: Euromonitor International from national statistics/OECD
Note: Data are seasonally adjusted
The key downside risk to the global economy is the continuing sovereign debt crisis in the eurozone and the fears of contagion of negative effects from a possible Greek exit from the currency union and even a collapse of the union itself. With the eurozone responsible for one quarter of world trade in 2011 then further crises in the currency union will have a global reach.
In the eurozone, voters in Greece and France have rejected austerity and the debate between austerity and stimulus is entering a new phase. The IMF has advised the UK to consider a plan B aimed at less austerity and more stimulus even advising that interest rates could be cut below their current (historically low) 0.5%.
In the second half of 2012 we will see a move towards more efforts to stimulate growth rather than austerity, with China also expected to increase stimulus in response to its Q1 slowdown. All eyes remain on the eurozone and also on the Greek election scheduled for June 17th 2012.