Global economic growth is going to disappoint previous expectations, according to a new report by the World Bank.
In a move some economists were expecting, the World Bank slashed its growth forecasts for many nations throughout Asia, citing weakness in China as a negative catalyst for the rest of the region.
Economic data from China and India suggest global demand has halted and economic activity may decline further in the future.
In China, exports fell by double digits in March, the worst data to come from the largest Asian economy in over a year. In total, exports fell 15% in total, a decline attributed largely to the strength in the Chinese yuan, which has made exports less competitive relative to other manufacturing countries.
New Zealand’s construction boom is a primary factor that is keeping the country out of economic recession. New Zealand has outpaced all other Organization for Economic Cooperation and Development (OECD) economies, and the nation has been the fastest growing OECD economy within the past year. The economy has grown at an annual 3.5 percent, and economists predict steady growth for the future.
Last week saw an accord reached between the P5+1 and Iran regarding the latter’s nuclear programs. Part of the agreement included lessening sanctions imposed against the nation that have seriously impaired its economy. Analysts believe this could lead to a serious turnaround of the Iranian economy, but how much growth will this really mean for the embattled Middle Eastern nation?
Years of Crippling Sanctions
According to analysts’ predictions, the Chinese economy may have grown seven percent in the first three months of 2015, the lowest expansion in six years. Trade and investment fell to levels not seen in years.
Many experts contend that Chinese policymakers should be worried, but officials do not necessarily see it this way. Even though the predicted seven-percent growth would be the worst performance for China since 2009, the figure is well within the government’s goal of fostering at least seven-percent growth for the year.
Many Americans tend to think of the Great Recession as a uniquely American experience. However, it had repercussions on economies around the world and led to a global financial crisis. The crisis is subsiding on a global level, just as it is in America, but some are still feeling its effects. Some economies face diminished GDP growth expectations and poorer nations may be disproportionately affected, a recent report indicates.
Weak fundamental data and rising savings and investment rates in the U.S. and China indicate recent trends towards economic improvement might be reversing.
American consumers are spending less and saving more. Some interpret this as an indicator that aggregate demand is depressed and economic growth is set to slow. Others have noted an economic contraction in the first quarter may be a possibility due in part to exceptionally cold weather. This is despite an easy comparison, noting that economic growth was sharply negative for the same period a year ago.
Singapore’s economy grew only .05 percent in the first quarter of 2015. This is very weak by Singaporean standards, especially when compared to the 4.9 percent expansion in the fourth quarter of 2014. The news forced economists to lower expectations of Singapore growth for 2015.
Australia is in the midst of an economic crisis, as it has some of the highest unemployment in decades and the price of iron ore (Australia’s chief export) is dropping to historic lows.
Hong Kong’s stock market rose to a 52-week high as more Chinese investors move money out of mainland markets where assets are considered higher risk.
The Hang Seng index of mainland companies with a listing in the Hong Kong markets rose 5.8% on Wednesday, the sharpest rise in prices since December 2011. Closing at over 26,000 points, the Hang Seng index ended trading at its highest point since May 2008, although still around 16% below its all-time high price in October of 2007.
