The global economic meltdown that was experienced across the world in 2008 had very serious implications on the US economy and it has taken almost five years for the country’s economy to recover. Most American economic forecasters have rosy expectations because the last five years have been very promising and 2014 is not in any way different. I tend to agree with the optimistic forecasters because there are signs that 2014 is going to be a great years in terms of economic growth. The ever improving consumer confidence and the buoyant stock markets are perfect signs of good things to come. I will try my level best to explain why the world economy will experience tremendous growth in 2014.
To begin with, the 2013 annual share index gain was the biggest in over twenty years and it is expected that the same rate of growth with be maintained. The 30% rise that was recorded n 2013 was a sign of good things to come for America’s S&P 500 share index. The global economic trends are in most cases influenced by America and therefore the global economy will also benefit from America’s rising share index. It is estimated that the global growth will be close to 5% in 2014 and this largely depends on America’s performance. The purchasing power of a particular country is in most cases used to determine the county’s economic growth. The global growth will definitely improve in 2014 because this has been the trend in the last few years. There has always been upbeat expectation every financial years especially after the financial crisis came to an end but it is important to point out that some of the expectations are never met.
Major world economies such as Britain and Japan have been on the recovery path and the future looks bright for the rich world. The eminent rise in Japan’s consumption is nothing to worry about because the country’s economy can cope with it. The large part of global economic recovery is attributed to America although some credit should also be given to Europe for their effort. The financial crisis hangover is still being felt in the Europe but the Americans have completely dealt with that situation. Most European nations are still performing poorly when it comes to reducing their private debt and that is why their corporate and household balance sheets are not in good shape.
The strong foundations in America are the reason why America is experiencing tremendous growth compared to the rest of the world. America has once again become very competitive because of its cheap energy and that has led to its in house revival of prices. Years of a relatively weak dollar and wage restraint have also been major factors when it comes to the Americas economic revival because they have led to higher investment, stronger consumer spending, higher share prices and faster job growth. The recent spending cuts have also had a significant impact on the economy. The recent trend rates and federal allocation are some of the major reasons why America’s economy is likely to grow by 3% in 2014. The real economic facts on the ground convince me to be more optimistic about America’s economic growth in 2014.
Posted in Economics