Global Economic Analysis

Global Eonomic Analysis is a macro-level study of all the economies of the world taken as a whole. Globalization has helped the world economy become more integrated and homogenized with the free movement of goods and services. Its objective is to unify prices of commodities and wages worldwide. Diffusion of technical knowledge and information is also a positive effect of globalization.

Global Economic Analysis tends to project a skewed picture of the economic development experienced by the world in general. Although globalization has marched on rapidly in recent years, it has not been a bed of roses all the way.

The darks days of the East Asian Currency Crisis and the recession of the Latin American economies of the 90’s may have been forgotten by the world but a lot more needs to be done to regulate the global financial markets further. International Trade has to be rationalized to give way to equitable development and to bring about a drastic reduction in poverty levels globally.

The broad macro-economic indicators on the basis of which an analysis can be done are the following :

• Gross Domestic Product (GDP),
• Growth of GDP
• Rate of inflation
• Per capita income
• Unemployment Level
• Balance of Payments
• External Debt as a percentage of GDP .

Countries from different regions across the world including newly industrialized nations such as China, Brazil and India and developed economies such as USA, Russia and some East European countries like the Czech Republic and Poland have been considered while doing the analysis. Analysis on South Africa and Australia have also been done.

The figures appearing in the table below gives a broad idea about the economic progress made by the concerned countries in recent years : (Based on 2005 figures)

CountriesGDP(current US dollars)Per capita GNI ,Atlas Method(US dollars)GDP growth rate (annual %)Population growth (annual %)Annual inflatio-n rate %Merchandise trade (% of GDP)Poland299.2 billion7110.03.2-0.01.663.3Zambia7.3 billion4905.11.618.961.6South Africa240.2 billion49604.9-0.75.049.3Czech Republic122.3 billion10,7106.0-0.2-0.0127.0China2.2 trillion17409.90.63.863.8India785.5 billion7208.51.44.228.2Brazil794.1 billion34602.31.37.224.7USA12.5 trillion43,7403.51.02.721.2Russia763.7 billion44606.4-0.519.348.5Australia700.7 billion32,2202.61.03.233

Although inflation rates have been found to be the highest in Zambia and Russia, both these countries have been experiencing steady economic growth of late. While high growth rates coupled with inequality in income continue to plague the BRIC (Brazil, Russia India and China) economies, Africa continues to be the poorest continent of the world with low per capita income and high population growth rates. The economies of the East European countries like Poland and the Czech Republic have however grown steadily over the years.

While analysing trends in the global economy it has been observed that serious challenges confront the WTO as far as implementation of the Doha Round of World Trade Talks are concerned. The Trade Talks aims to allow greater accessibility to world markets to goods produced in the Third World Countries. Agriculture continues to be the primary occupation in developing countries with more than 50% of the population employed in this sector. This gives rise to surplus labour, further aggravating the existing problem of income inequality and disguised employment.

Environmental degradation also poses a major challenge to globalization and adequate steps should be taken to curb this menace.

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