A World of Uncertainty and Transition
On Tour from Washington to Amsterdam
CHICAGO, July 11, 2011 – "The U.S. is expected to rebound from the soft patch we saw in the first half of 2011...(and) is expected to remain the fastest-growing industrial bloc in the next three to five years. That isn't saying much, however, given the baseline for growth elsewhere." Chief Economist Diane Swonk reviews economic prospects for major regions around the world.
View a video featuring Diane Swonk listing the major challenges facing the global economy, in the July issue of Themes on the Economy®. Read this month's issue. "This report provides a summary of recent meetings in Washington and Europe, where I exchanged information with economists from around the world."
- "Monetary policy in the U.S... evoked controversy, especially when it came to debating its effect on the value of the dollar. Most conceded, however, that the Federal Reserve has done a fairly good job of containing the crisis in the U.S., " said Swonk.
- "Canada has also benefitted from the same rebound in vehicle production that we have experienced. Disruptions related to Japan put a bit of a damper on those gains in recent months, but are expected to unwind fairly rapidly," she added.
- "Mexico continues to closely track the U.S., especially in the manufacturing sector. Vehicle production is well integrated across both our northern and southern borders...Brazil, Chile, Columbia and Peru are all moving forward with more market-oriented reforms and still flying high on commodity exports, while Central America's prosperity remains closely tied to the U.S."
- "Western Europe and its southern periphery are expected to slow, as austerity measures and tighter monetary policy dampen growth in the year to come," Swonk predicted. "Russia, the Ukraine and Turkey occupy a category al their own. Russia is clearly benefitting from its hold on oil and the buoyancy in commodity prices."
- In Japan, "Economic growth is expected to rebound quite sharply in 2012, as reconstruction efforts get underway... China is expected to slow, relative to the breakneck speed we have all become so accustomed to in recent years." Elsewhere in Asia, "Singapore and Hong Kong are expected to accelerate but risk overheating."
- "The new frontier of economic growth and political possibilities (is) in sub-Saharan and South Africa. The region is gaining a tremendous amount of foreign investment from China and India, in order to develop the rich base of commodities."
Full analysis of the different regions' economic prospects can be found in this month's issue. Some details remain confidential.
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