Better days expected in 2014
OTTAWA, July 25, 2013 /CNW/ - With much of the "eurozone" still mired in
recession, the global economy will expand at a tepid pace of 2.5 per
cent this year, according to The Conference Board of Canada's World Outlook - Summer 2013. This situation will begin to change as the U.S. economy picks up steam
toward the end of this year, and growth in the world economy is
expected to increase to 3.2 per cent in 2014.
"Now that the U.S. economy is heading in the right direction, Europe remains the main stumbling
block to higher growth in the world economy," said Kip Beckman, Principal Economist. "The latter region continues to be plagued by
record high unemployment rates, a fragile banking sector, and high
levels of government debt. "
• The world economy will expand by 2.5 per cent this year and 3.2 per cent
• The eurozone's unemployment rate is over 12 per cent and the rate for
young people in Greece and Spain is 50 per cent.
• China's economy will slow from an annual average of close to 10 per
cent in recent years to slightly less than eight per cent in 2013 and
Many banks in Europe remain undercapitalized and highly leveraged, and
some have been operating with huge losses. Another credit crisis in the
eurozone cannot be ruled out if the EU fails to address this issue. In
addition, continued labour market rigidity and a high degree of
regulation will limit growth prospects in Europe. Real GDP in the
eurozone is expected to drop by 0.5 per cent in 2013, and a gain of
only 1.1 per cent is forecast for 2014.
Growth in the Asia-Pacific region has been restrained by the
developments in Europe and the sluggish U.S. economy in the first half
of this year. However, fiscal and monetary policies implemented by many
governments in the region have helped blunt the weak state of the
The Asia-Pacific region will continue to lead the global economy with
real GDP growth of 4.7 per cent this year and close to five per cent in
2014. China's economic growth will slow to 7.9 per cent this year and
next, down from an annual average of almost 10 per cent from 2009 to
2011. South Korea and Taiwan are benefiting from the shift in
technology consumption from personal computers to smartphones and
tablets. Both countries are expected to expand in the 3 to 4 per cent
range over the near term.
SOURCE: Conference Board of Canada
For further information:
Francoise Makanda, Media Relations, Tel.: 613- 526-3090 ext. 389