The world’s economy is on its path to recovery, but it’s still fragile.
In addition to country data, the IMF World Economic Outlook also offers aggregate data for different regions of the world or groups of countries that share certain relevant common traits.
Advanced economies are gaining momentum, and the IMF has reflected it in its April 2017 report with an upward revision of the growth rate for this group of countries, set to 2% for 2017. The improvement on the estimates for advanced economies is mostly due to a higher-than-expected growth in the United States and a modest recovery in Europe. However, potential changes in the policy stance of the U.S. administration are a source of great uncertainty. In the medium term, weak productivity growth and an ageing population are likely to restrain growth.
|Country Group Name||2008||2009||2010||2011||2012||2013||2014||2015||2016||2017||10-year avg GDP %|
|Major advanced economies (G7)||-0.3||-3.8||2.8||1.6||1.4||1.2||1.7||1.8||1.8||1.9||1.0|
|Advanced economies excluding G7 and euro area)||1.7||-0.9||5.9||3.4||2.1||2.3||2.8||2.0||2.1||2.4||2.4|
|Emerging market and developing economies||5.8||3.0||7.4||6.3||5.3||4.9||4.6||4.0||4.1||4.6||5.0|
|Commonwealth of Independent States||5.3||-6.4||4.6||4.8||3.5||2.1||1.1||-2.8||-1.1||1.3||1.2|
|Emerging and developing Asia||7.2||7.5||9.6||7.8||6.9||6.9||6.8||6.6||6.4||6.3||7.2|
|Emerging and developing Europe||3.1||-3.0||4.7||5.4||1.2||2.8||2.8||3.5||3.5||3.3||2.7|
|Latin America and the Caribbean||3.9||-1.2||6.1||4.9||3.2||3.0||1.3||-0.1||-0.5||1.5||2.2|
|Middle East, North Africa, Afghanistan, and Pakistan||4.8||1.5||4.9||4.5||5.0||2.3||2.8||2.5||3.1||3.5||3.5|
|Middle East and North Africa||4.8||1.5||5.2||4.6||5.1||2.1||2.6||2.3||2.9||3.3||3.4|
Emerging markets and developing economies are expected to pick up pace at notable rates, but lower than forecasted in October, with a projected growth rate of 4.5% this year. Certain large economies in Latin America and the Middle East are dragging down the aggregate growth for emerging markets and developing economies even though China will be slowing down its growth a little less than expected. Many of the economies that heavily depend on energy and metal exports are still dragging their feet, struggling to adapt to lower commodity prices.
Taking a closer look, in emerging and developing Asia as a whole, growth is “projected to remain robust”, despite the downward revision of India’s growth. The ASEAN-5 region (Indonesia, Malaysia, Philippines, Vietnam and Thailand) should slightly accelerate its growth, despite Thailand’s setback after “a temporary dip in tourism and consumption in late 2016”.
The Gross Domestic Product of a country can be defined as the total monetary value of the goods and services produced within its borders in a year. GDP growth is expressed as a per cent. The average growth rate has been calculated using the geometric mean to obtain a ten-year equivalent rate.
The prospects for emerging and developing Europe are moderately positive, with an expected growth of 3% in 2017. There is a clear exception, though: Turkey suffered a severe slowdown in the last months of 2016 and, even though it is expected to partially recover, the forecast is highly uncertain due to political and military instability and the depreciation of the lira. Sub-Saharan Africa should also see a modest recovery, with a projected growth of 2.6% in 2017, mostly driven by the largest economies in the region.
The Latin American and the Caribbean growth, set to 1.1% will most likely be weaker than expected in October. While most commodity exporters in the region will see their situation improved, the outlook differs widely across countries. The Middle East, North Africa, Afghanistan and Pakistan region’s prospects have also been deemed too optimistic and have now been revised to a 2.6%, 0.8 percentage points down from October’s estimate, due to the OPEC’s November agreement to reduce oil production.
On the other side, the outlook for the Commonwealth of Independent States has improved and is estimated at 1.7% for the current year. Russia should see the end of its recession with a 1.4% growth rate, reflecting on the recovery of oil prices and domestic demand.
World’s GDP Growth by Region 2015
The GDPs of several countries can be combined to reflect the state of the economy of a particular geographic region (for example, countries in the Middle East) or of a group of countries at a particular stage of development (for example, advanced versus emerging economies).
Emerging and Developing economies dominated the period between 2006 and 2015. Emerging and Developing Asia, in particular, grew at an average annual pace of 8 %.
|Country Group||2006||2007||2008||2009||2010||2011||2012||2013||2014||2015||AVG. %
|Other advanced economies (Advanced economies excluding G7 and euro area)||4.8||5.1||1.8||-1.0||5.9||3.3||2.0||2.3||2.9||3.1||3.0|
|Emerging market and developing economies||8.2||8.6||5.8||3.1||7.5||6.2||5.1||4.7||4.4||5.0||5.9|
|Commonwealth of Independent States||8.9||9.0||5.4||-6.2||5.0||4.8||3.4||2.2||0.8||1.6||3.5|
|Emerging and developing Asia||10.1||11.2||7.1||7.5||9.5||7.7||6.7||6.6||6.5||6.6||8.0|
|Emerging and developing Europe||6.4||5.3||3.2||-3.6||4.7||5.5||1.4||2.8||2.7||2.9||3.1|
|Latin America and the Caribbean||5.7||5.8||3.9||-1.3||6.0||4.5||2.9||2.7||1.3||2.2||3.4|
|Middle East, North Africa, Afghanistan, and Pakistan||6.7||5.8||5.2||2.3||5.3||4.4||4.8||2.5||2.7||3.9||4.4|
According to the IMF, “despite setbacks, an uneven global recovery continues” in 2014. As a result of weaker-than-expected global activity in the first six months of 2014, the Fund revised its forecast for the world economy downward, to 3.3% for this year and to 3.8% for 2015. Medium-term risks to global growth, says the IMF, “include stagnation and low potential growth in advanced economies and a decline in potential growth in emerging markets.”
Overall, Advanced Economies are expected to expand at a pace of 1.8% and 2.3% in 2014 and 2015 respectively. The Euro Area though continues to drag its feet. After contracting 0.4% in 2013, it is predicted to return to a positive scenario this and next year but meagerly so, growing by 0.8% in 2014 and 1.3% in 2015.
As for Emerging Market and Developing Economies, the latest IMF estimate puts economic expansion at 4.4% in 2014 and 5% in 2015, still decidedly down from the peaks of 8% growth reached in 2006 and 2007 and also lower than previous Fund’s forecasts. Activity in Developing Asia (+6.6% in 2015) remains higher than average, though also weaker than it used to be until only three years ago. Sub-Saharan Africa (+5.8% in 2015) is probably the only region of the world bucking the trend, with the economy on the upswing and expanding faster than in previous years.
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