Evolution of Global Growth since 1994

October 9, 2012

New real growth forecasts released by the IMF show average annual world economic expansion in 2011-13 of 3.6% and 3.8% in the decade through 2013.  Those projections are down from actual growth of 5.0% in 2004-2007 but a shade higher than the 3.4% per year pace sustained in the decade through 2003.

The growth rate differential between emerging/developing economies and advanced ones was 1.6 percentage points per year in 1994-03 but swelled threefold to 5.0 percentage points over the subsequent decade through 2013, using IMF forecasts for this year and next. 

The following table documents annualized growth for selected economies for the sequential decades ending in 2003 and 2013 and compares the pre-Great Recession years of 2004-07 and 2011-13.

 

% per year   1994-2003 2004-2013 2004-07 2011-13
World   3.4 3.8 5.0 3.6
Advanced   2.8 1.5 2.9 1.5
  U.S. 3.3 1.6 2.8 2.0
  Ezone 2.2 0.9 2.5 0.4
  Japan 0.9 0.8 1.9 0.9
  U.K. 3.5 1.0 3.0 0.5
  Canada 3.5 1.8 2.8 2.1
Developing   4.4 6.5 7.9 5.7
  Brazil 2.5 3.9 4.7 2.7
  Russia 0.7 4.3 7.6 3.9
  India 6.0 7.7 9.0 5.9
  China 9.4 10.3 12.1 8.4

Source: IMF World Economic Outlook, October 2012

Among advanced economies,

  • Britain suffered the sharpest slowdown in per annum real economic growth between two sequential decades, plunging 71% from a 3.5% to 1.0%.
  • The U.S. and Canada experienced similar growth to one another in both decades, and growth was cut roughly in half in each case in 2004-13.
  • A slower rate of growth in Euroland was well established long before 2004, and the U.S.-Ezone growth spread has been narrower in 2004-13.
  • Japan has been a bellwether with extremely slow growth in both decades.  Unlike the other countries, growth in Japan was similar in both decades.
  • The pace of Japanese GDP in 2004-07 was twice as fast as in 1994-03. 
  • The U.S., Britain and Canada experienced slower annualized growth in 2004-07 than in the decade to 2003.  Euroland’s pace was faster, however.
  • Euroland, Britain, and Japan, representing about a quarter of world GDP, are projected have sub-1.0% growth over the three years to 2013.
  • Britain, where the imposition of fiscal austerity has been huge, is suffering the largest growth slowdown between 2004-07 and 2011-13.

Among the developing economies,

  • Both China and Russia will experience a 3.7 percentage point drop of annualized growth in 2011-13 from 2004-07
  • Russia went from being an economy with less than 1% growth in 1994-2003 to more than 4.0% in the next decade.
  • Annualized growth in India will be 3.1 percentage points less in 2011-3 than in 2004-07. 
  • Collective growth for developing nations in the more recent decade exceeds that in 1994-03 in spite of the Great Recession and current slower pace.
  • Annualized growth in China in 2011-13 will be a percentage point less than in 1994-03.
  • Indian and Brazilian annualized growth in the latest three years is comparable to what was experienced in the earlier of the two shown decades.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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