WorldEconomicReport
GreatEXPECTATIONS for 2014
T
he year 2013 came and went and, in the end, did not make that much of a difference. Sure, major economic crises were avoided even if it was just barely in some cases, but in many ways it was a forgettable year in terms of major global economic recovery. All hope is now being vested in the New Year. Will 2014 live up to the high expectations? e US seems to be on the verge of the long awaited breakthrough year after the nasty recession of 2008/2009, as the latest data point to a solid year. e Eurozone seems to be stable— at least for now. e BRIC countries have lost much of their luster, but China has overcome a temporary weakness and is back to a strong growth pattern even though it is understandably not at the torrid pace of years past. Mature economies, such as most Western countries, are poised to take over a leading global role again. Last year the BRICs contributed a combined $458 billion to global GDP growth and the G4 (US, Japan, Germany and Britain) $360 billion. It is expected that 2014 will see a reversal of sorts: the BRICs will contribute $500 billion and the G4 $544 billion to global growth. America will contribute more than China, and Japan more than India. e Federal Reserve of the US will attract a lot of attention, including bidding a drawn-out farewell to an old friend—the “quantitative easing” program spearheaded by the US Federal Reserve. Despite all its naysayers, it has worked marvelously well since its inception in 2009. ere is a sharp difference between the QE-adhering countries (e.g. US, UK and Japan) and the stubborn and misguided insistence on austerity measures of the eurozone. is tale of two different approaches will continue to stay in sharp focus in 2014. A lot of gloomy anniversaries will be observed in 1914 (100th anniversary of the outbreak of World War I and 75th for WWII), so let’s stay optimistic on the economic side and predict that the growth climate will be mostly sunny with very few thunderstorms building up. e outlook is not too bad. Welcome 2014 and its promise of reinvigorated global growth! Americas: Hopes are high for 2014, and the third quarter of 2013 seemed to be a harbinger of things to come when annual growth broke through the 4 percent mark. Earlier, more conservative estimates of around 2.6 percent were revised optimistically to just above the 3 percent mark. Mexico’s growth in 2013 will likely drop to 2.9 percent, down from 3.9 percent in 2012. As fiscal and energy reforms are beginning to show a positive impact, the growth rate for 2014 should accelerate to 3.8 percent. Meanwhile, Canada’s economy is joined at the hip with the US and will follow its neighbor’s growth pattern. Down south, Brazil’s timid rally will continue but it will remain behind the other BRIC countries and behind the high expectations prevailing in the country ever since the economy was somewhat unshackled and took off a few years ago. Bringing down the inflation rate will feature prominently next year in Brazil. On the other hand, hapless Venezuela will continue to struggle with, well, just about everything.
Venezuela enters 2014 as the worst economic performer in Latin America as of late 2013. Inflation will be up again and may well be above 50 percent. So, watch for continued food shortages, US dollar shortages and general mayhem. GDP could actually contract by 0.5 percent this year. Steel Production North America YTD November 2013 (‘000 mt): 109,293mt (-2.2%) Steel Production South America YTD November 2013 (‘000 mt): 42,397mt (-1.5%) Total Vehicle Production in Nafta countries YTD November: 15,392,051units (+4.3%) Total Vehicle Production US November 2013 YTD: 10,291,391 units (+6.9%)
GDP – latest quarter Consumer Prices latest compared to previous one and previous year and forecast 2014
Industrial Production year-on-year
Steel Production YTD November ‘13 in 000 mt and compared to last year
United States
+4.1% Q3/+2.7%
+1.2% Nov/+1.8%
+3.2% Nov
79,798 (-2.1%)
Canada
+2.7% Q3/+2.3%
+0.7% Oct/+1.2%
+3.2% Nov
11,406 (-8.6%)
Mexico
+3.4% Q3/+3.4%
+3.6% Nov/+4.2%
+0.1% Oct
16,793 (+1.5%)
Brazil
-1.9% Q3/+2.6%
+5.8% Nov/+5.5%
+0.9% Oct
31,522 (-1.4%)
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Prime
Volume 7; Issue 1
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