The global economy is the economy of all the world's countries. The total world population now stands at over 7 billion and the global unemployment rate is 9% with approximately half the world's population paid less than $2 a day.
The global economy is picking up again after five years of uncertaintity and slow economic growth. The IMF is predicting global growth of 3.7% in 2014 rising to 3.9% in 2015. However, much uncertainity remains. Low inflation in developed economies means that these economies take longer to deal with debt burdens and are at increases risk of deflation.
The second half of 2013 saw growth in the US and European economies (particularly UK, Germany and France).
Growth in the US has been helped by cheaper energy from fracking , renewables and more oil and gas exploration. This cheaper energy is bring manufacturing jobs back to the US and helping to boost domestic demand. Recent winter weather conditions have hampered growth in the construction sector and have slowed demand in the construction equipment sector which saw exports drop by 25% in 2013. Growth should pick up in this sector with continued federal investment in infrastructure, new residential house builds and refurbishment and the energy boom.
In Europe growth is expected to be uneven with growth being slow in stressed economies such as Portugal and Greece but confidence picking up in UK, Ireland and even Spain showing some improvement.
Developing economies such as China and India will continue to have strong growth in 2014 and 2015. China has benefitted from increased investment with the Chinese govenment now focused on quality growth of 7.5% in 2014. India which is less reliant on exports expects growth of 5.4% in 2014 and 6.4% in 2015.
Much uncertainity still remains in the global economy with greater optimism needed to stabilise growth.
IMF (International Monetary Fund)