Global Arab Network | Global economy to recover, but outlook still highly uncertain, says Economist Intelligence Unit

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Global economy to recover, but outlook still highly uncertain, says Economist Intelligence Unit

Global Arab Network - - Hannan Taha

Monday, 14 December 2009 12:47

The cyclical economic upswing in the developed world will continue into the early part of 2010 and, apart from eastern Europe, developing countries will recover relatively quickly from the 2008-09 financial and economic crisis.
But according to 2010: country by country, just published by the Economist Intelligence Unit, the pick-up reflects the impact of unprecedentedly aggressive fiscal and monetary stimulus. In 2010 governments will face the very difficult task of trying to restore fiscal discipline while also ensuring that withdrawals of stimulus measures do not kill off nascent economic recoveries.
The Middle East and Africa will be the best-performing regions of the world, with growth supported by increased oil production and investment in infrastructure. However, China and India will once again be the world's fastest-growing major economies.

Although Economist maintains that the crisis has already inflicted its deepest wounds, its impact will continue to be felt throughout 2010. Moreover, downside risks to economic stability still abound. These include:

· The risk of new asset bubbles forming in the wake of unprecedented monetary and fiscal loosening

· Deflationary pressures in highly indebted countries

· An increase in the frequency and intensity of social and political unrest, given increased unemployment, weak growth and impending fiscal austerity measures in many countries

2010: country by country, the well-established annual forecasting guide from the Economist Intelligence Unit, contains a concise assessment of the political and economic prospects for the year ahead for almost 200 countries, together with key economic indicators and a summary of forecast numbers.

Highlights in the 2010 edition include:

· World GDP growth will rise to 3.2%, compared with a contraction of 1.2% in 2009…

· …but 12 countries will still experience economic contractions. Nearly half of these are in eastern Europe, and western and Eastern Europe together will be home to fully 15 of the world's 20 slowest-growing counties

· Qatar will be the world's fastest-growing economy for the second consecutive year as three new LNG "super trains" come on stream

· Japan will lose its place as the world's second-largest economy to China

· Inflation in Zimbabwe will fall to single digits for first time since 1988, although this owes much to the arithmetic effects of the extraordinarily high base in 2009

· The winner of Brazil 's presidential election is expected to maintain that country's prudent macroeconomic policies

· There is a growing risk that the state of Yemen will disintegrate, as the government struggles to cope with the threats posed by rebels in the north, a secessionist push in the south and the presence of al-Qaida

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through its global network of over 500 analysts, UIE continuously assess and forecast political, economic and business conditions in almost 200 countries. As the world's leading provider of country intelligence, UIE helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

Global Arab Network

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