While global real GDP growth is estimated at 2 percent in 2013 (compared to 2.3 percent in 2012), the global economy could expand 2.7 percent growth in 2014 and further accelerate through 2018, predicts D&B which just released its 2014 to 2018 Global Economic Outlook
"Recovering from the Great Recession continues to challenge global economies. Although growth is still constrained for various developed countries, many are improving and are poised to experience a sustained acceleration in growth headed to recovery," said Paul Ballew, chief economist at D&B.
"Despite the concerns that linger in every region, 2013 was a year in which businesses adapted to the realities of a sluggish and prolonged recovery. This approach should serve them well as they navigate the challenges and risks of 2014 and beyond."
The report notes that the economic recovery since the recession remains the most protracted of the last century, with global GDP growth well below previous trends.
Of 132 countries assessed by D&B's Country Risk Rating Score, 93 rated worse in 2013, compared to early 2008, while only 15 improved. The end of monetary easing, fiscal pressures in advanced economies, and uneven restructuring efforts in emerging markets could hinder a full recovery.
After decelerating in 2013, the North American economy is expected to grow by 3.1 percent in 2014, compared to 2.5 percent in 2013. A strengthening U.S. private sector and demand for hard commodities from countries such as China is expected to boost regional economic growth. In addition, Euro Zone healing and steady global economic gains will likely continue to modestly improve North American economies through 2018.
The Federal Reserve's decision to end its quantitative easing program (which provides financial institutions with new capital to encourage increased lending and liquidity) could undermine the global economic recovery. As other countries consider similar proposals to reduce public debt and spur GDP growth, the pace and timing of the phase-out remain key concerns, particularly in the U.S.Recovery remains uneven in advanced economies
The pace of economic recovery in advanced economies remains mixed. Increases in global public sector debt proved especially alarming in 2013, as many advanced economies struggled to minimise their government debt percentage of GDP. In contrast, however, countries such as the U.S., U.K., and Japan saw significant declines in household debt in 2013, which should support moderately strong economic growth in these markets.
While many emerging markets were pivotal in moving the global economy out of the Great Recession, several have failed to positively restructure the supply-side drivers of their economies.
Critical factors such as the relative ramp-up in asset prices, rampant credit extension resulting in bubbles and inappropriate lending, declines in external sector deficits, and increases in public debt over the last five years will impact how quickly some emerging markets recover through 2018.
Venezuela, Angola, Iran, and Nigeria are among those countries that may have misallocated inflow of foreign capital relative to other emerging markets. Renewed focus on short-term vulnerabilities, supply side economics, and political and social pressures could spur recovery in emerging markets.