Global economy in 2011
Flaws in China's growth model are becoming obvious. Falling property prices are starting a chain reaction that will have a negative effect on developers, investment, and government revenue. The construction boom is starting to stall, just as net exports have become a drag on growth, owing to weakening US and eurozone demand. Having sought to cool the property market by reining in runaway prices, Chinese leaders will be hard put to restart growth. GDP in China is projected to grow at less than 9% in 2011. To achieve growth in 2012, China will focus on expanding domestic demand to counter a slowing global economy. Compared with 2011, fiscal policy in 2012 will be more proactive and monetary policy will be eased on the margin.
Global economy in 2011 is expected to be weaker compared to 2010 World GDP growth of 5%. The BRIC countries are expected to be drivers of the World economy in 2011. As per IMF, global GDP Growth is forecast at 3.79% for 2011.
| Countries |
GDP growth % |
| US |
1.5 |
| Eurozone |
1.4 |
| Japan |
-0.7 |
| China |
9.1 |
| Brazil |
2.1 |
| Russia |
4.8 |
| India |
6.9 |
| Canada |
3.4 |
| South Africa |
3.1 |
| Source: Tradingeconomics.com |
Goldman Sachs released a new global outlook for 2012 and 2013 in a period of substantial economic and financial market uncertainty for the Euro, on December 2 2011
• For the world economy as a whole, our forecast for real GDP growth in 2012 is 3.2% and 4.1% for 2013.
• We expect growth to slow in the US, although we still do not expect a recession.
• We have made the biggest adjustment to our 2012 forecasts in the Euro area, where we now expect a deeper recession and only gradual stabilization late in 2012. But this is conditional on major policy changes in the region, probably involving a partial ‘mutualization’ of the existing debt stock supported by the European Central Bank.
• In the emerging world outside Europe, and especially in China, we expect the spillovers to be smaller, although a key risk to this forecast lies in more substantial disruptions to global capital flows
Outlook 2012:
2012 may not bring much of cheer due to continuing woes of the economy in the developed economies. The global GDP growth is projected at 3.2-3.5%. The impact on China, India and some of the developing Asian countries is expected to be small.
Indian market players are convinced that India has robust long-term growth prospects. Consumption of petrochemicals is projected to hit 53.2 mln tons by 2016-2017, up from 31.9 mln tons in 2011-2012. The low per capita consumption levels point to the potential of the Indian polymer market and helps growth forecasts remain optimistic. India’s infrastructure sector is expected to draw nearly US$100 bln (€74 bln) in investment in 2011. Additionally, the government plans to spend US$16 bln in the agricultural sector in 2011, while US$15 bln has been allocated for rural and urban housing development.
On October 5, 2011, the world lost a visionary and creative genius. Apple co-founder and Chairman Steve Jobs died at the age of 56. Jobs had been suffering from various health issues following the seven-year anniversary of his surgery for a rare form of pancreatic cancer in August 2004. The college dropout helped popularize the personal computer and created the iPod, iPhone and iPad.
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