Malaysia expects stability amid global storm in '13
The Star/Asia News Network
December 25, 2012, 12:58 am TWN
The New Year is just around the corner. In many ways, it will be a relief to say farewell to 2012, a year which has seen the advanced countries struggling amid seemingly unending economic and financial uncertainty.
Naturally, the tail end of the year is a time to look ahead with hope and expectation. And indeed, there is growing optimism among investors about the global economy. However, is this realistic when some experts refuse to rule out the possibility of an overall contraction?
When presenting its Economic Outlook in late November, the Organization for Economic Cooperation and Development (OECD) warned that the global economy was expected to make "a hesitant and uneven recovery" over the coming two years.
OECD Secretary-General Angel Gurra pointed out that we were not yet out of the woods. "The near-term outlook is not only weak, but also downside risks predominate. The lingering euro-area crisis remains a serious threat to the world economy. At the same time, if left unresolved, the fiscal cliff could tip the U.S. economy into recession and weigh on global growth," he added.
The eurozone is expected to see a 0.4-percent contraction this year and a further 0.1-percent fall in 2013. Even if the White House and congressional leaders can hammer out a short-term agreement on the budget that will avoid the fiscal cliff, growth in the United States is forecast to grow at 2 percent next year, down from the 2.6-percent forecast in May.
With the United States and Europe battling to revive their economies, the OECD believes the world economy will grow by 3.4 percent in 2013, up from 2.9 percent this year.