Since the economic downturn that began more than five years ago, the world economy has struggled to lurch forward. There are signs, however, that the global economy is beginning to pick back up, albeit slowly.
Market research firm IHS today released top economic predictions for the coming year. Among them is the prediction that the global economy will grow 3.3% in the year 2014. This growth would represent a slight increase over the 2.5% growth measured for 2013.
This modest growth could be an indication that economies around the world are finally digging themselves out of the financial crisis of the past half-decade. IHS expects the U.S., Europe, and China to lead the economic turnaround through growing export markets. Growing consumer spending in the U.S. and European governments ending austerity spending programs will be two of the factors in the growth seen next year.
“The easing of the twin headwinds of private sector de-leveraging and public sector austerity will bolster the improved outlook, especially for the developed economies,” said Nariman Behravesh, chief economist at IHS. “Many emerging economies will also likely enjoy stronger growth in 2014, pulled along by export-led growth to the United States, Europe and China. That said, the global growth rebound is likely to be quite modest.”
Other predictions from IHS include a mixed bag of economic trends.
The U.S. dollar is predicted to strengthen as the U.S. economy grows 2.6% in 2014. The U.S. Federal Reserve is also expected to begin ending its massive stimulus programs over the course of the year.
Emerging markets are expected to see significant real GDP growth through exports, though commodity prices are expected to stay flat.
Despite the good indications, IHS does not predict the economic turnaround will include all of those who have lost their jobs over the past few years. The firm predicts that unemployment in established markets will hit 7.9% in 2014 - only a slight drop from this year's 8.1% unemployment. Improved productivity and continued reorganization efforts among companies were cited by IHS as major causes for continued high unemployment.