Regional developments and outlook

A majority of the developed market economies have finally entered a period of growth, more than five years into the aftermath of the global financial crisis. Gross domestic product (GDP) for developed countries as a whole is estimated to have grown by a subdued rate of 1.0 per cent in 2013, but is expected to strengthen to 1.9 and 2.4 per cent in 2014 and 2015, respectively. A variety of policies have effectively promoted growth and stability in these economies. The United States of America weathered the fiscal headwinds generated by the sequester, helped to some extent by the continued large-scale purchasing of longterm assets by the United States Federal Reserve (Fed). Japan’s new, bold stimulus policies have so far worked to boost growth and end deflation. The euro area, as well as the rest of Western Europe, finally exited recession, buttressed by the European Central Bank’s (ECB) policies for stabilizing confidence in the region. But economic activity remains weak in most developed countries, as high unemployment persists. These economies are also facing a number of different uncertainties and risks in the prospects: for the United States, a continued political wrangling on budget issues and a possible uneven process of tapering the quantitative easing; for the euro area, continued fiscal tightening and a fragmented banking system, with many banks remaining fragile; and for Japan, an anxiously awaited package of structural reforms.

Related Subject(s): Economic and Social Development