Is the global economy on a comeback trail?

Scattered signs of improvement in 10 economies seem to indicate a turnaround

The US Capitol Dome is seen behind the entrance to the US Senate (R) on Capitol Hill in Washington. File photo / Reuters
There is a ray of hope in the world economy. Economists are of the view that there are scattered sign of improvement the world over. In US, companies added 1,46,000 jobs in November. The unemployment rate in November was the lowest since December 2008. Certainly, there are still big risks out there. But the good news is simply that things are a lot less bad than they had been in the past.

Cheered by the early signs of recovery, and relieved that disaster has been avoided (read fiscal cliff), India’s stocks markets rang in the New Year in style, with the benchmark Sensex hitting a 20-month high at 19,581 points. However, it is still too early to say that the world's animal spirits are beginning to leap again. On 02 January, the Sensex rose 0.68 per cent, or 133.43 points, to end at 19714.24, after earlier rising to its highest close since January 6, 2011.

Here is a round-up of the key economies around the world

 

 1) United States

The US economy grew faster than previously thought in the third quarter, helped by exports and government spending. Gross domestic product expanded at a 3.1 per cent annual rate in the third quarter, the Commerce Department said. It was the fastest pace since late 2011 and more than double the second quarter's 1.3 per cent rate.

The White House and top Republicans struck a deal to avert huge tax hikes and postpone automatic spending cuts that had threatened to send the US economy into recession.

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2) China

China's manufacturing activity expanded in December for a third straight month, adding to signs the world's number two economy is emerging from a prolonged downtrend. The official purchasing managers' index (PMI) stood at 50.6. With the main index above 50 for three straight months, the survey indicates that China's vast factory sector is expanding.

Annual growth of China's industrial profits quickened to 22.8 per cent in November from October's 20.5 per cent, reinforcing signs of a steady economic recovery. The GDP grew 7.4 per cent in the third quarter from a year earlier.

The World Bank has raised its growth forecast for China, saying stimulus measures and approval of infrastructure projects will help boost growth. The bank said it now expects China's economy to grow by 8.4 per cent in 2013, up from its earlier projection of 8.1 per cent.

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3) Brazil

Industrial output posted its first annual increase in more than a year in October. Output from factories and mines expanded 2.3 per cent. 

Demand for durable goods was a principal engine behind rise in industrial production, government statistics agency IBGE said.

In Sao Paulo, Brazil's largest city, Christmas sales went up 5.4 per cent from the same period last year.

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4) Russia

According to the Federal Statistics Service, Russian retail sales rose by 4.4 per cent in November, year-on-year, after a 4.0 per cent rise in the previous month.

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5) France 

The economy grew 0.2 per cent in the third quarter as households splashed out on clothing and trade data turned positive.

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6) Italy 

Italian business confidence rose after a recession eased in the third quarter and the manufacturing-sentiment index moved to 88.9 in December from 88.5 the previous month.

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7) Greece
 
S&P, a ratings agency, raised Greece’s credit rating by six notches to B-. Greece has not left the eurozone. The currency has not collapsed. And it seems unlikely in 2013.

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8) United Kingdom
 
In November, car sales soared 15 per cent to 1.14 million vehicles, the highest level for that month since 2007, before a recession caused a dramatic decline in demand and led to the bankruptcy filings of General Motors and Chrysler.

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9) United Arab Emirates

In 2012, the average apartment price in Dubai rose by 13 per cent and was expected to grow at the same rate next year as speculative buyers prop up demand, a study by property consultancy CBRE showed.

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10) India

And finally, on December 12, Finance Minister P Chidambaram said: “ I am very encouraged by the indications of the green shoot in the economy in terms of production …”

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Also Read | Looking Ahead 2013
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