Global economy watch - January 2013
Business as usual is changing: our predictions for 2013
- Advanced economies projected to be smaller than emerging economies in 2013 for first time since reliable records began.
- Emerging economies in the ‘driving seat’ of global growth in 2013.
- Expanding cities of the emerging world a gateway to young and new affluent consumers of the world.
- US growing by around 2% but Eurozone still flat at best.
- Commodity price instability to continue.
At a glance
- In 2013, world GDP in real terms is projected to be around 10% above its pre-recession peak in 2008 and around 40% above 2000 levels.
- In 2013, China, India and Brazil will together add around one trillion dollars to the world economy in nominal terms. This is equivalent to the entire annual economic output of Switzerland. China alone will add $788 billion, equivalent to the annual economic output of the Netherlands.
- In 2013, Australia will overtake Spain to become the 12th largest economy in the world. The US and China will remain first and second while the UK will remain sixth.
- OECD governments will need to borrow an additional $2.1 trillion, 1.5 times the projected increase in their money GDP in 2013.
- The population of London will rise to 8.5 million in 2013, an increase of over 120 thousand people, which is equivalent to adding the whole of the population of Cambridge over the year.
- Average house prices in the UK will remain broadly flat in 2013. This will be well below the expected inflation rate of 2.5%, pushing real house prices down further below their pre-crisis 2007 peak.
- Despite only a modest recovery by historic standards, the UK could still be the best performing developed European economy in 2013 given the slow or negative growth expected across other major EU economies.
Economics in business blog