July 2011 EIU Global Economic Forecast
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The global economic forecast slowed in the first quarter of 2011 due to rising oil prices negatively impacting consumer spending. While job growth weakened, the report assumes the economy will regain momentum in the second half. However, fiscal tightening and household deleveraging will constrain medium-term growth. The eurozone economy also slowed, with fiscal austerity and high borrowing costs holding back peripheral countries. The earthquake in Japan severely contracted the economy in the second quarter, but a recovery is expected in the second half.
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July 2011 EIU Global Economic Forecast
- 1. Global economic forecast July 11th 2011
- 10. 16 16 16 15 12 - Tensions over currency manipulation lead to a rise in protectionism - China’s economy crashes - New asset bubbles burst, creating renewed financial turbulence - Disorderly defaults by developed sovereigns rock financial markets - Oil prices remain at extremely high levels
- 11. 10 10 10 9 8 + Oil prices slump - Economic upheaval leads to widespread social and political unrest - The euro zone breaks up - The US dollar crashes - Developed economies suffer stagflation
Editor's Notes
- The euro zone is forecast to underperform the US in 2009 as it suffers from a massive drop in external demand, the impact of the global financial crisis and the unwinding of domestic imbalances. The US recovery will be driven partly by aggressive fiscal stimulus which will make itself felt from the second half of 2009 and some restocking, after the extensive drawdown of inventories in the first half 2009.
- The euro zone is forecast to underperform the US in 2009, largely reflecting the severe weakness of Germany, which, like Japan, remains highly exposed to the global trade cycle. The US recovery will be driven partly by aggressive fiscal stimulus, which will make itself felt from the second half of 2009.
- The euro zone is forecast to underperform the US in 2009, largely reflecting the severe weakness of Germany, which, like Japan, remains highly exposed to the global trade cycle. The US recovery will be driven partly by aggressive fiscal stimulus, which will make itself felt from the second half of 2009.
- Although we are forecasting steady growth in oil demand in 2011-13, ample supply and capacity will prevent significant price gains. While our forecast suggests markedly lower prices in 2009-13 than in 2008, they are still relatively high in both historical and real terms.
- Policy rates in the largest industrial economies are forecast to remain at ultra-loose levels at least until the end of 2010. Concerns not to inflate fresh bubbles will persuade the Federal Reserve (the US central bank) to start to tighten policy from 2011.