Reports on forecasts for the global economy for 2012 are not very optimistic, with countries throughout the world expected to experience an economic slowdown.
According to a survey conducted by Reuters, who polled around 600 economists, it is reported that the world economy will lose momentum this year, although it will keep moving in the right direction. A Reuters poll that covers all of the top 20 developed and emerging economies, as well as some others in Asia, suggests global economic growth will slow to around 3.3 percent this year from an estimated 3.7 percent.
The survey has suggested the year will see deteriorating economic conditions in Europe, which will mean companies in the region face further earnings downgrades. The sovereign debt default from Greece will create a serious negative impact on the European financial system. Unemployment will also be a key problem in the Eurozone.
In another report by the U.N., the economic situation of countries across the world is expected to come under severe stress this year. The World Economic Situation and Prospects (WESP) 2012 report, released by the U.N. Department of Economic and Social Affairs, gives a detailed picture of seven geographical regions and predicts that growth rates for the next two years will slow down in most of them, with the exception of the African continent.
Failure of policymakers, especially those in Europe and the U.S., to address the jobs crisis and prevent sovereign debt distress and financial sector fragility from escalating poses the most acute risk for the global economy in the outlook for 2012-2013, the WESP report states.
As per the WESP report, Africa is expected to continue to grow, defying the global trend. The continent is forecasted to see an increase in its overall growth from 2.7 per cent in 2011 to 5 percent in 2012. However, growth will vary greatly among countries in the continent due to military conflicts, corruption, lack of infrastructure and severe drought in certain areas.
According to the Call for Action report published by Geneva-based World Economic Forum (WEF), the world is facing significant and urgent challenges that weigh heavily on prospects for future growth. The report has listed issues like decelerating global growth and rising uncertainty, high unemployment and potential protectionist policies of different countries as major concerns for the global economy.
On a positive note, the WEF report states that while the global economy faces severe challenges, it can regain momentum by supporting the economic transformation underway in the emerging world by meeting the infrastructure needs around the globe and by beginning to realize the promise of a greener economy.