Developed markets to recover

Real GDP growth will be more balanced in 2014 and developed economies will be back in the driving seat, according to new figures from Euromonitor.

“2014 is set to be a critical year in the global recovery process,” said the company’s Economy, Finance and Trade Manager Hilary Walsh, “with clear signs that real economic growth is becoming more robust and the structural problems, which previously thwarted the world’s economies, being addressed.”

Global real GDP growth is forecast to be 3.7%, according to Walsh, an 0.8% increase on 2013. Developed economies will grow 2.0% – their fastest rate since 2010 – while emerging economies are forecast to expand at around 5.2%, which will be their fastest rate since 2011.

The US has a positive outlook, said Walsh, with lower unemployment, the end of quantitative easing and real GDP growth of around 2.5%, while “the eurozone will also return to positive output growth in 2014, a sign that the worst of the sovereign debt crisis is over.”

Despite this, weakening currencies in developing economies could expose vulnerabilities in 2014 as investors in the west regain confidence in economies such as the US, Japan and the UK. A weak currency makes a country’s exports relatively cheaper but imports more expensive.