A global upturn in 2014, Simon Baptist

Once a month, The Economist Intelligence Unit produces a comprehensive forecast for the global economy. It’s popular with our clients, and also provides a useful opportunity for me to step back and look at the bigger picture.

What is driving growth, or impeding it?

What are the risks to watch out for?

In this month’s forecast, newly published, we have identified two opposing but related forces as key to the economic outlook in 2014. On the one hand, the upturn in the rich world, particularly in the US, promises to boost global economic growth in 2014. American consumers are spending more, and Europe’s economies are also poised to perform better this year.

On the other hand, volatility in emerging financial markets—ironically triggered in part by the US policy response to improved conditions—is casting something of a pall on an otherwise promising outlook.

EIU global forecast – An improved US outlook

Two opposing but related forces are driving the outlook for the global economy in 2014. On the one hand, the rich world’s recovery continues (with intermittent setbacks) to be consolidated. Stronger performances in the US and the euro zone, in particular, will boost global GDP growth this year. On the other hand, volatility in financial markets—ironically triggered in part by the US policy response to improved conditions—is casting a pall on an otherwise promising outlook. Turbulence in emerging markets has increased. Nonetheless, The Economist Intelligence Unit continues to expect global GDP growth to accelerate to a four-year high in 2014. READ MORE

How is the combination of the rich world’s recovery and financial-market turbulence affecting your business or region?

Please let me know at [email protected] or via Twitter at @Baptist_Simon.

Best regards,

Simon Baptist
Chief Economist and Asia Regional Director