The Edge Economic Forum Global recovery expected to continue this year

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The Edge Economic Forum Global recovery expected to continue this year
Business & Markets 2014
Written by theedgemalaysia.com
Monday, 10 March 2014 09:58

KUALA LUMPUR: The global economic recovery is expected to continue this year, led by the improvement in the economies of the US and Europe, said the panellists at The Edge Economic Forum. Even so, their views were laced with caution, saying that recovery will likely take place at an uneven pace.

Geoff Lewis, executive director and market strategist at JP Morgan Asset Management in Hong Kong, said: “The US is doing well and is still the most powerful economy [worldwide]. Europe has structural problems, but it is enjoying a cyclical recovery ... There are doubts about China, so perhaps that’s a neutral factor. There are concerns over the quality of its growth and that it’s not going to accelerate, dropping to 7%.”

The US economy is projected to grow 2.8% this year and 3% in 2015, according to International Monetary Fund estimates. Europe’s growth, on the other hand, will crawl at a sluggish pace of 1% in 2014 and improve slightly to 1.4% in 2015.

Song Seng Wun, regional economist at CIMB Research Pte Ltd, concurred with Lewis. He noted that the unemployment rate remains a dampener on consumption in Europe although it is headed in the right recovery direction.

“There’s still some way to go where Europe is concerned, [there remains] a huge difference between unemployment rates,” he said.

Song also noted that Asia’s exports are highly correlated with the growth in Europe and the US. “For the outlook closer to home, the region is fairly dependent on the state of external demand, especially [demand from] the US and Europe. If they don’t grow fast enough, we’ll lag behind. If the US [economy] improves, more people will spend, resulting in busier factory activity here.”


This article first appeared in The Edge Financial Daily, on March 10, 2014.