Europe
GLOBAL ECONOMY
The situation in Europe is
extremely delicate. The recession hit Europe extremely
hard due to the interdependent relationship between EU
member nations and the large
volumes that are usually traded between them. The end of
2013 saw the end of the Eurozone crisis for now, with
concerns over the break up of
the Eurozone subsiding. Having said that, in December the
inflation rate fell to 0.7% fuelling fears of deflation, as
warned by the IMF.
Far East
China and Japan have both
seen contrasting economic
results over the last 2 months.
China’s growth has stabilised
at 7.7%, above the government's target of 7.5%. There
have been concerns with
P.15
Meanwhile growth of private sector firms in Europe is
said to have improved with
Germany leading the way
whilst France has seen holt in
its slowdown. Both France
and Germany are in worrying
situations. Germany's growth
is constantly falling short of
predictions with recent results
showing growth at 0.4% in-
some of the mass investment
not being productive alongside the emergence of shadow banking (lending by nonbanking countries). Despite
this, the government has introduced measures such as
free trade zone in Shanghai
to encourage growth. In addition, the housing market hit
$1.1 trillion in sales, raising
concerns of an imminent
housing bubble caused by
stead if 0.7% as predicted.
France has seen its economy
enter a risky recovery due to
unemployment being close to
11% and weak economic
growth figures. The Head of
the European Central Bank,
Mario Draghi, has stated how
there has been a drastic improvement across the Eurozone but acknowledges the
risks. However he backs European growth by highlighting
the fragile situations in other
economies such as the problem of inflation in the USA
which is at a rate not much
higher than the EU's .
large increases in demand
financed by unsustainable
borrowing.
Japan has finally seen an
end to its 20 year deflation
nightmare. Consumer prices
rose at the fastest rate in 5
years at 1.2% and is half way
to achieving the government's
target of 2% in 2015. This
shows that Prime Minister
Abe's policies are working a
year after he came to power.
With the global situation inconsistent throughout, it is evident that the recession has had a detrimental impact worldwide. However with USA and other developing nations appearing to be on the road to recovery, it appears that 2014 could
be a turning point.
USA: with many problems being solved at the moment and the economy seeing positive results, it is clear that the nation is winning
the battle against the long lasting effects of the recession it started
WINNER
Europe: despite the positive news coming out of the UK, the "big guns" of Europe are failing to fire when needed to and help boost
global growth. The situation is extremely uncertain, so we will have to wait and see what happens but with growth falling short of
expectations the near future does not seem too good.
LOSER
Far East: after two decades Japan looks to be winning it battle against deflation whilst China has stunned its critics with stable
growth, showing that it will be