European economies keep brakes on global growth
Eaglewood, Colorado - Global GDP growth is set to rise from 2.9 percent this year and 3.5 percent in 2015, despite continuing woes in many European economies and declining outlooks for Brazil, China, and the US, market watcher IHS said in its June forecast.
According to IHS, Australia, Canada, Germany, Japan, Sweden and the US are among only a handful of developed countries now at or above their pre-crisis peak output levels, while the real GDP of the troubled economies of Europe is still far below 2007 levels.
Europe posted a lacklustre first-quarter as growth in Germany and a firming recovery in Spain were countered by stagnation in France, a renewed dip in Italy, and sharp relapses in The Netherlands and Portugal.
Recent easing by the European Central Bank will help Eurozone economic activity to gradually firm. Even so, IHS expects Eurozone growth to be limited to 1.1% in 2014 before improving to 1.6% next year. Meanwhile, the UK economy is projected to grow a robust 3.1% this year and 2.7% in 2015.
The underlying growth rate of the US economy is in the 2.5–3.0% range, and by most measures economic activity has bounced back in the second quarter. Real GDP, said IHS, is now projected to increase 2.2% in 2014, 3.1% in 2015, and 3.4% in 2016, supported by accelerations in business fixed investment and consumer spending.
With regard to China, HIS reported signs of an end to economic deceleration helped by government stimulus measures. Industrial production growth, it said, had stabilised, while retail sales and export growth have picked up a bit.
Due to the deepening construction recession, however, IHS has lowered China’s real GDP growth forecast to 7.3 percent in 2014 and 7.1 percent in 2015.