Abstract:
Although 2007 has been a year of low growth for the world economy, however the success of the third world economies in this year has been encouraging. While the US economy has experienced low growth rate in this year, countries like China and India have registered high growth rates.
2007 turned out to be another year of low growth for the world economy. The estimated rate of growth of the world economy in the current year is 5.2 %. However the silver lining is the fact that more and more countries are tasting success with economic reforms. The rewards of the shift of third world countries from state-controlled economies to free open market economies are evident at the end of 2007. The year saw high level of investments in different countries. Moreover the growth in the world economy in 2007 has been driven by economies like China and India rather than by developed economies like USA and Japan. This trend is expected to continue in 2008.
As we embark on a journey through yet another year in 2008, let us look back at the economic snapshots of 2007.
Slowdown in the US economy had major impacts on the world economy. The US economy grew at an estimated 1.9% in 2007, the lowest growth rate of the country in six years.
The value of the dollar weakened in 2007.
The real estate sector, one of the important segments of the US economy faced a major decline in 2007.
Unemployment in the US rose marginally from 4.6% at the beginning of the year to 4.7 % at the end of the year.
Interest rates were reduced by the Federal Reserve in the US.
The US trade deficit declined in 2007 as exports became cheaper due to a weaker dollar.
The Chinese economy, on the other hand grew at an estimated 11% in 2007.
Private ownership saw major thrust in China as number of billionaires grew to 66 by the end of November 2007 (China had about 20 billionaires in March 2007). China is now second only to the US in terms of number of billionaires.
At the end of 2007 China is home to five of the ten wealthiest companies in the world.
Disparities in income distribution have been a concern area for China in 2007.
The Indian economy grew at an estimated rate of 8.5% approximately. Indian GDP grew by 9.3% during the first quarter of the financial year 2007-2008.
Aggregate industrial output in India grew by 9.2% between April and September 2007.
Services on the other hand grew by 10.6% in India between April and June 2007.
The Latin American and Caribbean economies grew by 5.6% on an average in 2007. While this is quite low compared to the growth rate of many Asian countries, still it's an encouraging trend, considering the fact that this is the fifth consecutive growth year for the Latin American and Caribbean economies.
Poverty in Latin America and the Caribbean dropped to 35% in 2007 while unemployment dropped by 8% in the current year.
The Sub Saharan African economies grew at an approximate 6% in 2007. This is a positive indication after years of stagnancy in the African economies.