Global Economic Outlook 4th quarter 2011Stressful Times |
The fourth quarter edition of Deloitte Research’s Global Economic Outlook offers timely insights from Deloitte Research’s team of economists about the trends and events that are shaping the marketplace.
The issue begins with a cautiously optimistic outlook for the future of the euro and details key considerations for the long-term economic success in the Eurozone, taking into account the formidable recessionary pressures in the region’s periphery. The issue’s not-so-optimistic outlook for the United States argues that Europe’s economic problems have a high probability of getting worse, not better, and potentially dragging the United States into another recession. Even without the sovereign debt crisis, the United States is in a challenging situation, demonstrating extremely slow growth and a dormant job market.
Additionally, this edition of the Global Economic Outlook provides perspective on the factors that influence the price of gold and offers economic outlooks for China, Japan, the UK, India, Russia, Brazil and Mexico.
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The Global Economic Outlook report is published quarterly by Deloitte Research in the United States (part of Deloitte Services LP).
Topics
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Gold prices: Defying gravity? Gold’s prowess as a monetary asset, a financial asset, and as jewelry has contributed to its decade-long ascent. The price of gold will likely stabilize as the Eurozone crisis is resolved, the U.S. economy is revitalized, and inflation in the emerging markets is tamed. |
Geographies
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Eurozone: A crucial time for action There is a case for cautious optimism about the euro’s longer-term prospects. At the same time, dwindling global demand and a yet-to-be-solved sovereign debt crisis are posing significant recessionary pressures, especially in the peripheral nations of the EU. |
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United States: The coming recession A recession of European origins could wash back into the U.S. economy by hampering trade, industrial production, corporate profitability, and banking. History never repeats itself, but the current financial situation has some striking similarities to 2008. |
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China: Slower growth, longer-term risks China’s economic growth is decelerating because of the weakening global economy and tightened monetary policy. Overall debt has nearly tripled in the last five years, and significant investments in fixed assets may loom heavily over China’s longer term. |
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Japan: On the bright side… Japan is recovering from a natural disaster, and additional spending will likely accelerate the Japanese economy next year. However, slower overseas growth, a high-valued yen, and slower-than-expected reconstruction spending are introducing obstacles to the country’s economic prospects. |
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United Kingdom: Waiting for a Policy Response Economic growth in the UK is deteriorating at the hands of declining domestic fundamentals and downward economic pressures from abroad. The country’s outlook hinges on policy responses, both at home and within the Eurozone. |
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India: Trudging along, for now Indian policymakers are trying to curb rapidly rising inflation and simultaneously sustain growth, despite a weakening global economy. GDP growth may continue to hover around 7.5 percent for the current fiscal year. |
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Russia: Political clarity, policy uncertainty The announcement that Prime Minister Putin will return as president, exchanging jobs with President Medvedev, adds a needed note of political clarity, but uncertainty abounds pertaining to Russia’s economic policy outlook. |
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Brazil: Changing direction The central bank in Brazil recently reversed its monetary policy from inflation fighting to recession prevention. In the wake of a decelerating global economy, authorities decided to rethink their currency market intervention. |
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Mexico: Looking north Mexico faces significant challenges. However, its formidable economic potential cannot be overlooked. The country has failed to keep pace with the BRICs, but possibilities abound for boosting future growth. |
Previous issues of the Global Economic Outlook are available here.
Global Economic Outlook - Q4 2011
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