As the end of 2013 approaches and looks forward to a new year, the first question might come to mind: Will we see an end to the global financial crisis after five years of recession?
Despite signs of a global economic recovery, the answer could be negative.
Since the Lehman Brothers collapse in 2008, the world has longed for a positive answer. However, every new year holds new hopes without any of them being realized by the end. Will 2014 be different?
According to the latest economic reports, the world’s largest economy has rebounded as America’s third quarter GDP growth rose 3.6% due to a recovery in the labor market and the unemployment rate fell 7%. This is the lowest level in 5 years.
In Europe, the sovereign debt-induced financial crisis has subsided, along with the worst recession in countries surrounding the euro, below promising expectations for a positive return to growth indicators, in addition to China, where expectations of slow but enviable growth in the Asian giants suggest, and here it is, Japan is returning to “life” thanks to the policies of Prime Minister Shinzo Abe.
In general, the International Monetary Fund expects global economic growth rates to increase from 2.9% this year to 3.6% next year.
The risk is the possibility that the Federal Reserve (US Federal Reserve) will revert to a program of massive bond purchases to fuel growth. However, the consequences for global financial markets are still unknown.
In the world’s largest economies, amid growing fears of an economic downturn in Europe and the slowdown in some emerging economies like China and India, the Japanese government should put pressure on radical reforms despite its success in overcoming the worst of the “Great Recession”. Second economy has its slowest growth in a decade With the general election coming up, political disputes make it increasingly difficult to determine when to begin the free market reforms needed to support growth.
In China, policymakers are trying to stem the rise in debt and adopt radical reforms to open up financial markets and improve the status of overcrowded state-owned companies. This is a complex and sensitive political process that may limit the country’s economic growth rate, which is expected to drop to 7% for the first time in 1990 next year.
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