In response to the global crisis, many countries are implementing reforms to bolster their economies. For several nations, this will lead to sustainable growth. However, in the short-term, some economies will continue to experience difficulties.

To help you reassess export markets, source goods or seek investment opportunities, you should factor in country growth projections. This is because healthy or increasing growth often results in robust demand, while decreasing growth frequently leads to lower priced products and attractive investment opportunities.

Growth Differs Markedly

In 1999, world growth is anticipated to meet last year’s expectations of 2.2% GDP, and rise 3.5% in 2000, according to the International Monetary Fund (IMF). But not all economies will move in the same direction.

Growth of advanced economies is expected to decline slightly to 1.6%, while increasing to 3.5% in developing countries. Imports, on the other hand, are expected to remain the same in advanced economies, but jump significantly in developing markets.

European Union Growth Sound

The Organization for Economic Co-operation and Development (OECD), projects the European Union to achieve solid growth of 2.2% and 2.5% GDP in 1999 and 2000, respectively.

Although slightly lower than last year, the IMF estimates 1999 growth to reach 2.6% in France, 2% in Germany, and 1.9% in Italy. The UK’s GDP is projected to achieve .9%, the lowest in the EU, but begin improving in the second half of the year.

Eastern European Direction Mixed

Central and Eastern European GDP growth is expected to hit 2.2% this year, slightly lower than 2.5% estimated last year, according to the IMF. Hungary and Poland have fared well, and both economies are anticipated to grow approximately 5% this year. However, Russian GDP, which is expected to fall again, this year by 8.3%, has dragged down the regional forecast.

In addition to concerns over reversing the reform process, Russia continues to lack the economic, financial and political policies that will restore investor confidence.

Western Hemisphere GDP to Dip

Canada primarily has been impacted by the decline in commodity prices, especially forest products, coal and base metals. Nevertheless, the IMF projects Canada’s GDP growth to reach 2.2 % in 1999.

Brazil’s devaluation of the real is creating instability that will result in lower growth projections for the region. Prior to this, the IMF projected Argentine GDP growth to reach 3%. And Chile’s economy, which has suffered a deterioration in its external accounts, mostly due to lower world commodity prices, was estimated to reach 2% GDP growth.

According to the IMF, the Mexican economy, which is stinging from lower oil revenues, is anticipated to hover around 3.5% growth this year. However, by 2000, its GDP growth is projected to exceed 4%.

Asia on the Mend

Asian growth is expected to jump from 2.6% in 1998 to 4.3% this year. Indonesia, Malaysia, the Philippines and Thailand, all negatively affected by the crisis, are expected to rise from the ashes, reducing double-digit negative growth to -1% this year. India and China are expected to top 4.8% and 6.6% growth, respectively.

Japan’s ability to strengthen its financial infrastructure is uncertain. Thus, its growth projections hover around 0%, showing minimal improvement in the year 2000.

About The Author John Manzella [Full Bio]

John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.




More Articles | Speaker Programs | Speaker Demo | Videos | Services