World economy in a lower gear

World economy in a lower gear

The world economy’s rate of growth is slowing to 3.5 % for 2012 (production of goods and services), the Euro Zone is touching recession level and the U.S.A. might be next to follow whereas China and India is bottoming out

IMF head Christine Lagarde has announced that the institution will lower the global economic growth rate soon, in April its economists predicted still a growth rate of 3.6 % and this will be soon adjusted downwards. A global recession level is normally reached when the growth rate drops below 2.5 %.

The GDP growth rate in the Euro Zone is to contract by 0.4 % according to estimates of Bloomberg, it will be the second time since 2009 and not only in the Southern European areas but also in Germany and the Purchasing Index for the Industrial Sector has reached the narrow gap between growth and contraction (below 50 points) and also the one for services is decreasing. The American Purchasing Index of ISM Institute for Supply Management for the industrial production sector (12 % of all output) fell as well under the magic mark of 50, mostly because of lack of new orders. The official estimates of the annual American economic growth rate have been reduced to 1.9 to 2.4 %. The USA and the Euro Zone are contributing 44 % to the global GDP and they are offering no stimulating impulses. China’s growth rate is actually 7.6 % and the BRIC countries are expecting also less growth, namely Brazil only 2 % and the BRIC states annual growth rate will drop from 9.2 % (2011) to 6.3 % the lowest rate since the global recession of 2009.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.