LONDON: Next year promises only a slight pick-up in the world economy and even that will again depend heavily on the United States and emerging markets as Europe stalls, according to the latest Reuters Polls.
In many ways, the outlook for 2013 hinges on whether emerging economies like China and Brazil finally deliver the upturn that many economists had expected this year.
There again seems little hope that growth in the biggest developed economies, many of them burdened with major financial problems, will accelerate much next year.
Threats to the stability of the world economy have a now-familiar ring to them, whether in the form of the smouldering sovereign debt crisis in the recession-hit euro zone, or geopolitical convulsions in the Middle East.
While more swathes of central bank cash have largely placated volatile financial markets over the last year, many of the big economic questions remain unanswered.
The threat that the United States will start the new year by plunging into a round of severe and automatic budget cuts remains real.
Stalled talks on the U.S. "fiscal cliff" grew more heated on Wednesday. Still, there are reasons why most economists polled by Reuters think next year will better the mediocre growth of 2012, if only by a little.
And business surveys in China suggest the slowdown there, more protracted than most economists had expected, has ended.
"With the exception of the fiscal cliff, the major risks are broadly the same as 12 months ago. However, they do attract slightly different nuances," said Philip Shaw, chief economist at Investec in London.
"Quite clearly, the lagging economy is likely to be the euro zone. While financial confidence has improved markedly over the last few months, that hasn't extended to economic confidence."
He said it was unlikely the region will see anything resembling an upturn until the second half of 2013. That weak euro zone outlook will pressure the euro next year, although forecasts for most major currencies are steady.
Overall, global forecasts collated from 22 economists suggested the world economy will grow around 3.2 percent in 2013, compared with around 3.1 percent forecast for 2012 in the last Reuters quarterly global economy poll.
That outlook is slightly more pessimistic than those from either the International Monetary Fund or the Organization for Economic Co-operation and Development.
RISKS RECEDING?
Reuters polls of professional forecasters suggest next year will be a slightly calmer one for the world economy. "It has been a fatiguing year for market participants and observers," said Huw McKay, senior international economist at Westpac, pointing out the many uncertainties of 2012.
"Euro zone survival, political leadership in the U.S. and China, recession risks, commodity price volatility and activist monetary policy in many guises.Individually such things fray the nerves. Collectively they apply a blow-torch to them."
At least some of those risks have receded. Last week's global poll of equity market strategists suggested world stocks should gain firmly next year, helped by a surfeit of central bank cash and led by Asian shares in particular.
Yields on major government bonds are also expected to climb modestly through 2013, a Reuters poll showed on Thursday, but this is contingent upon real economic recovery.
indiatimes.com
In many ways, the outlook for 2013 hinges on whether emerging economies like China and Brazil finally deliver the upturn that many economists had expected this year.
There again seems little hope that growth in the biggest developed economies, many of them burdened with major financial problems, will accelerate much next year.
Threats to the stability of the world economy have a now-familiar ring to them, whether in the form of the smouldering sovereign debt crisis in the recession-hit euro zone, or geopolitical convulsions in the Middle East.
While more swathes of central bank cash have largely placated volatile financial markets over the last year, many of the big economic questions remain unanswered.
The threat that the United States will start the new year by plunging into a round of severe and automatic budget cuts remains real.
Stalled talks on the U.S. "fiscal cliff" grew more heated on Wednesday. Still, there are reasons why most economists polled by Reuters think next year will better the mediocre growth of 2012, if only by a little.
And business surveys in China suggest the slowdown there, more protracted than most economists had expected, has ended.
"With the exception of the fiscal cliff, the major risks are broadly the same as 12 months ago. However, they do attract slightly different nuances," said Philip Shaw, chief economist at Investec in London.
"Quite clearly, the lagging economy is likely to be the euro zone. While financial confidence has improved markedly over the last few months, that hasn't extended to economic confidence."
He said it was unlikely the region will see anything resembling an upturn until the second half of 2013. That weak euro zone outlook will pressure the euro next year, although forecasts for most major currencies are steady.
Overall, global forecasts collated from 22 economists suggested the world economy will grow around 3.2 percent in 2013, compared with around 3.1 percent forecast for 2012 in the last Reuters quarterly global economy poll.
That outlook is slightly more pessimistic than those from either the International Monetary Fund or the Organization for Economic Co-operation and Development.
RISKS RECEDING?
Reuters polls of professional forecasters suggest next year will be a slightly calmer one for the world economy. "It has been a fatiguing year for market participants and observers," said Huw McKay, senior international economist at Westpac, pointing out the many uncertainties of 2012.
"Euro zone survival, political leadership in the U.S. and China, recession risks, commodity price volatility and activist monetary policy in many guises.Individually such things fray the nerves. Collectively they apply a blow-torch to them."
At least some of those risks have receded. Last week's global poll of equity market strategists suggested world stocks should gain firmly next year, helped by a surfeit of central bank cash and led by Asian shares in particular.
Yields on major government bonds are also expected to climb modestly through 2013, a Reuters poll showed on Thursday, but this is contingent upon real economic recovery.
indiatimes.com
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