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Every One of the World’s Big Economies Is Now Growing

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A decade after the world descended into a devastating economic crisis, a key marker of revival has finally been achieved. Every major economy on earth is expanding at once, a synchronous wave of growth that is creating jobs, lifting fortunes and tempering fears of popular discontent.

No tidy, all-encompassing narrative explains how the world has finally escaped the global downturn. The United States has been propelled by government spending unleashed during the previous administration, plus a recent $1.5 trillion shot of tax cuts. Europe has finally felt the effects of cheap money pumped out by its central bank.

In general terms, improvement owes less to some newfound wellspring of wealth than the simple fact that many of the destructive forces that felled growth have finally exhausted their potency.

The long convalescence has yielded a global recovery that is far from blistering in pace, and geopolitical risks threaten its demise. Many economists are skeptical that the benefits of growth will reach beyond the educated, affluent, politically connected class that has captured most of the spoils in many countries and left behind working people whose wages have stagnated even as jobless rates have plunged.

And still the fact that every major swath of the globe is expanding is a source of optimism. There is no guarantee that this expansion will prove more equitable. Yet if growth were to evolve, bolstering wages while adding to the security of middle-class lives, the beginning would probably feel something like now.

“The world is less reliant on a few star performers,” said Barret Kupelian, senior economist in the London office of PwC, the global accounting and consulting company. “If something bad happens in one economy, the fact that global growth is spread gives you more assurance that this is more sustainable.”

Growth Across the Globe

For the first time since the financial crisis a decade ago, all of the world’s major economies are growing.

The United States, the world’s largest economy, is into its ninth year of growth, with the International Monetary Fund lifting expectations for expansion to 2.7 percent this year from 2.3 percent because of the tax cuts.

China has diminished fears of an abrupt halt to its decades-long growth trajectory. Europe, only recently dismissed as anemic and hopelessly vexed by political dysfunction, has emerged as a growth leader. Even Japan, long synonymous with grinding decline, is expanding as well.

Rising oil prices have lifted Russia and Middle East producers, while Mexico has so far transcended fears that menacing trade rhetoric from the Trump administration would dent its economy. Brazil, still suffering the effects of a veritable depression, is flashing tentative signs of recovery.

The result is a hopeful albeit fragile recovery, one vulnerable to the increasingly unpredictable predilections of world leaders.

Threats of nuclear annihilation exchanged by President Trump and the North Korean leader Kim Jong-un have sown fears. Britain’s pending departure from the European Union — known as Brexit — holds the potential to ensue absent a deal, subjecting Europe to grave uncertainty about the rules of trade especially for finance. And Mr. Trump’s on again-off again vows to tear up the North American Free Trade Agreement while unleashing a trade war with China also risks derailing growth.

“We used to operate under the idea that Western markets are politically stable, while we accepted that frontier markets were risky,” said Martin Scheepbouwer, chief executive officer of the OLX Group, which operates online classified advertising platforms in 41 countries. “Nowadays, with Brexit in Europe and the presidency in the United States, there’s a new level of instability looming over the economy. That’s something that concerns us.”

Photo

Not until the summer of 2012, after Mario Draghi, the European Central Bank chief, vowed to do “whatever it takes,” did Europe’s economic siege lift. Credit Fredrik Von Erichsen/DPA, via Agence France-Presse — Getty Images

The world economy is expected to grow by 3.9 percent this year and next, up from 3.7 last year, and 3.2 percent in 2016, according to the I.M.F. That is positive. Yet in the years before the crisis, global growth typically exceeded 4 percent.

As the World Economic Forum this past week released an assessment of risk factors featuring a survey of 1,000 experts, it found that 93 percent of respondents saw increased threat of political or economic confrontations. Some 79 percent fretted about heightened likelihood of military conflict and 73 percent saw rising risks of an erosion of world trading rules.

The report also warned of rising economic inequality, growing threats to cybersecurity and increased incidence of extreme weather enhanced by climate change.

“Many of these risks are increasingly systemic,” said Margareta Drzeniek Hanouz, an economist at the World Economic Forum, adding that they threaten “catastrophic consequences for humanity, and for the economy.”

Global businesses appear cautiously optimistic that the good times can last.

In Poland and Brazil, online job listings are growing rapidly, according to OLX, a clear indication of growth. Across Europe, real estate ads offering homes for sale have increased at more than double the pace of rental properties, another sign that people are operating with more money.

The global crisis began more than a decade ago with the calamitous end of an American real estate bonanza that set off a global disaster involving so-called derivatives.

Photo

Mexico, a major producer of avocados, has so far transcended fears that menacing trade rhetoric from the Trump administration would dent its economy. Credit Ronaldo Schemidt/AFP

As the reckoning played out from the United States to Europe to Asia, oil prices plunged, hitting Russia and the Middle East. Soybean farms in Brazil and Argentina saw orders plummet. So did mines in Australia and India, and computer chip fabricators in Malaysia and South Korea.

Washington engineered swift relief, with a bank rescue and an enormous injection of credit from the Federal Reserve. But Europe prolonged the agony with bitter recriminations over who should clean up the mess.

As European governments bailed out national banks, foisting the costs on taxpayers, investors demanded higher interest rates to continue lending, raising existential questions about the euro. Not until the summer of 2012, after the European Central Bank chief Mario Draghi vowed to do “whatever it takes,” did the siege lift.

This year, the 19 nations that share the euro are expected to see economic growth of 1.9 percent, according to I.M.F. That is not scorching. In Spain, Greece and Italy, young people still grapple with terrible rates of joblessness. Yet compared with the 4.5 percent decline in 2009, and smaller contractions in 2012 and 2013, it makes for a different era.

As recovery has spread, factories in Eastern Europe have bustled with additional orders. Auto plants in the Czech Republic, Slovakia, Poland and Romania have sent growing volumes of cars toward Germany, France and the Netherlands.

DSM, a Netherlands-based multinational company that makes nutritional products, opened a $60 million factory in Rwanda last May that is buying soy and corn from nearly 10,000 local farmers and using it to produce instant porridge.

Photo

Auto plants in the Czech Republic, Slovakia, Romania, and Poland have sent growing volumes of cars toward Germany, France and the Netherlands. Credit Bartek Wrzesniowski/AFP

“We are investing heavily in Asia and also in Africa because the growth of the population there is stronger,” said the company’s chief executive officer, Feike Sijbesma. “Africa, which always was the forgotten continent, is not the forgotten continent any longer.”

The reawakening of Europe combined with growth in the United States has kept Chinese industry humming to satisfy demand for goods, from auto parts to tools to clothing. More factory production has lifted prices for commodities, and increasing revenues at copper producers in Chile and Indonesia, gold mines in South Africa and silver operations in Sweden.

The world is now enjoying a positive feedback loop, with growing business confidence leading to more hiring, delivering gains in consumer spending. More money in consumer pockets gives businesses more reason to expand.

“There’s basically no country in the world where the consumer is not doing well,” said Bart van Ark, chief economist at The Conference Board, a business and research association in New York.

The question now is whether new investment will materialize quickly enough to sustain expansion. Factories in Germany, France, the Netherlands, and Portugal were operating at close to full capacity at the end of last year, according to data analyzed by The Conference Board.

In the United States, investment is increasing, adding to momentum for expansion. In Europe, the growth is uneven.

The biggest concern comes from Washington, where the Trump administration has frequently vowed to punish Mexico and China for their lopsided trade balances with the United States — a step that would raise the cost of components used by American factories. In a sign that such talk has moved beyond rhetoric, the Trump administration this past week slapped protective tariffs on imports of solar panels and washing machines.

“You get into a trade war, that’s the real worry,” said Ben May, a global economist at Oxford Economics in London. “The impacts on global growth would be quite severe.”

NY Times



126 Comments on "Every One of the World’s Big Economies Is Now Growing"

  1. Davy on Mon, 29th Jan 2018 6:38 am 

    Shut up billy, how many times have we heard that regurgitated whine out of you? When are you going to the old folk’s home in the jungle where you can play with your pet cobra and listen to the monkey troop? You can eat all that fish and rice and watch others run the 2 acre farm. You know you would never get your hands dirty. What a piece of work.

    Oh, billy stop the drama this is the internet. I think you are on the internet in your little condo way too much. I am here often but I have a cell phone. I am doing something. I am outside and productive. You don’t do shit but sit on your ass. You must be weak and pale.

  2. Mad Kat on Mon, 29th Jan 2018 7:23 am 

    Davy, maybe because it is true? Everyone here knows it but you deny it. So be it.

    I have noticed that you are on here many many times over 24 hours. Many more than I am. No life? Family ignores you? Can’t sleep. Awww! Good!

  3. Mad Kat on Mon, 29th Jan 2018 7:32 am 

    “Now, the Russians appear to have responded to a new, trillion dollar US program to develop and deploy an anti-missile system that would negate their ballistic missile system: the ‘Kanyon.’ Fact imitates fiction. … A similar device launched from the Atlantic Ocean would devastate the US East coast, leaving it under a lethal shroud of radiation for generations. …” True or? Want to find out? Keep poking the Russian bear.

    https://www.zerohedge.com/news/2018-01-28/russias-doomsday-weapon-disinformation-or-disaster

    Do you live on the coasts? Two thirds of Americans do. ~200,000,000+.

  4. Davy on Mon, 29th Jan 2018 7:43 am 

    The only thing true is you are a lonely old man that has been infecting this forum with hate and personal revenge emotions for over 5 years. You are a waste case that is degrading what could be a useful and vital place for people concerned about energy and collapse to meet. You are constantly off topic and dominate the space here. If you notice when you don’t post much my post go down accordingly. This is because I don’t have to moderate your extremist anti-American nutter filth. I have proposed this before so I doubt you will take me up on it but don’t post for 3 days and I won’t. Let’s give others a chance to voice their minds. You won’t do that because you are a narcissistic piece of shit parading as an enlightened intellectual. You are here to find a special connection with the other piece of shit grehggieT.

    The only other one on here as much as you billy is the nedernazi who actually is here almost all the time. I wonder when he sleeps. I guess you geriatrics don’t need as much sleep or something. Please for the sake of the others billy lets you and I go off line for 3 days as a starter. Let’s make this board better. Anything I can do to get you offline works and this is good for the board.

  5. I AM THE MOB on Mon, 29th Jan 2018 8:06 am 

    Greg

    You have terminal cancer as well! And you will die a horrible death within the next decade! You can run from Malthus but you can’t hide!

  6. Cloggie on Mon, 29th Jan 2018 9:30 am 

    Davy pretends to defend his country against “anti-Americans”, but in reality he is defending the interests of the 1% that is destroying America with mass immigration from the third world. For some reason unknown to me he sees himself as a 1%-er as well. Davy is himself America’s worst enemy. He will cover up for any crime the war mongers from Washington have in store for the rest of the world: WW2, 9-11, Vietnam, Syria, Iraq, Ukraine, you name it: Davy will justify it, hook, line and sinker. And anybody who opposes the destruction of America through third world immigration will be insulted as “racist” or “nazi” and the rest of the George Soros vocabulary. Davy has never anything of substance to say about energy. He will just tell you that renewable energy won’t work, that peak-conventional oil is somehow significant and that the world is falling apart. Davy, the shabby guy from Eastern Europe who imagines to be a big guy, is a little POS.

  7. GregT on Mon, 29th Jan 2018 9:53 am 

    “Greg, My condolences.”

    Thanks Bill. It’s going to be a rather sad week.

  8. Davy on Mon, 29th Jan 2018 10:22 am 

    Please, nedernazi spare me the drab drama. It is not even worth the response. Why not say something of use. Who cares if I cleaned your clock over the past few days and upset your stupid little Dutch pride. We have more important fish to fry than your hurt feelings.

  9. GregT on Mon, 29th Jan 2018 10:49 am 

    “It is not even worth the response.”

    Then why did you respond?

    “We have more important fish to fry than your hurt feelings.”

    By “we” would you be referring to yourself, MASTERMIND, I AM THE MOB, pat, and all of the other sock puppets? Or just the multiple personalities in your own head?

  10. Davy on Mon, 29th Jan 2018 11:13 am 

    Shut up grehggieT, you are a waste of time. You can’t even do a good stalk and prick anymore. You are turning irrelevant. Are you depressed? Is that why you are at the therapist?

    grehggie, when was the last time you made an actual contribution to the board? Was it two or three days ago? Anti-American stalking and pricking is not a contribution. It is a waste of space on the board. Get a life grehggie. Spend some time with your neglected wife before she looks elsewhere. Do something with the kids or don’t they want to be with a nutter dad? Go walk the dog and or play in your small little greenhouse. What a boring little life.

    IMA, grehggie, see what happens when you screw with me. I avoid you because you are disagreeable like a hemorrhoid. You don’t even give a good debate. At lease the nedernazi has some debate qualities with ideas. Even dumbass billy debates as best he can. I am beginning to think you enjoy the abuse. Ask your therapist if receiving a clock cleaning is part of why you stalk and prick Americans. grehggie are you a masochist too?

  11. I AM THE MOB on Mon, 29th Jan 2018 11:17 am 

    Greg

    I am glad your friend died! The world is better and more importantly a more brighter place without another paranoid like you in it!

  12. I AM THE MOB on Mon, 29th Jan 2018 11:18 am 

    Greg

    I bet your wife will moan like a whore when the goons raper her! Over and over again!

  13. Boat on Mon, 29th Jan 2018 11:21 am 

    Greggiet,

    It is tough to lose a friend. Sorry for your loss.

  14. Cloggie on Mon, 29th Jan 2018 11:41 am 

    You have terminal cancer as well! And you will die a horrible death within the next decade! You can run from Malthus but you can’t hide!

    https://www.youtube.com/watch?v=IdneKLhsWOQ

  15. GregT on Mon, 29th Jan 2018 11:47 am 

    Thanks Boat,

    Her son is married to our daughter, and HER daughter is 7 months pregnant with her first grandchild. She has dual citizenships, both American and Canadian. She was born in Washington State and married a Canadian, and her daughter and husband are both Americans, living in PA.

    She was still completely fine at Christmas, and has rapidly gone downhill since. They have her on fentanyl for the extreme pain, and she is no longer lucid. They thought that she had already died last week, so they removed the fentanyl patch. She came to at that point, and that is when she decided on a doctor assisted suicide, or MAID as they call it in Canada. (Medical Assistance in Dying)

    Her kids are both in their early 30s, and she is only 54. Like I said, very sad times ahead.

  16. Cloggie on Mon, 29th Jan 2018 11:56 am 

    Sorry to hear it Greg. We have arrived at an age where people are falling away in ever rapid pace.

  17. onlooker on Mon, 29th Jan 2018 12:23 pm 

    Yeah sorry Greg for your loss. And Mob/MM stop being an insensitive prick!

  18. I AM THE MOB on Mon, 29th Jan 2018 12:35 pm 

    Greg

    Your daughter is going to be spread open wide eagle by the gangs of goons when society collapses! I bet she will moan like a whore when they rape her! Over and over again! And if that bitch won’t swallow cum they will put it on a spoon for her!

  19. I AM THE MOB on Mon, 29th Jan 2018 12:38 pm 

    Greg

    Your daughter will scream HELP ME DADDY! I DONT WANT A BIG BLACK DICK IN MY ASSHOLE! ITS TOO BIG! SHUT UP WHORE THEY WILL SAY!

  20. I AM THE MOB on Mon, 29th Jan 2018 12:44 pm 

    Got Bread and stand on white bitch head! BLM!

    https://imgur.com/a/AANAQ

  21. I AM THE MOB on Mon, 29th Jan 2018 12:53 pm 

    Greg

    Don’t think of it as Rape! Think of it as strangers with benefits!

    https://imgur.com/a/sYVv1

  22. GregT on Mon, 29th Jan 2018 1:12 pm 

    Thanks guys.

  23. I AM THE MOB on Mon, 29th Jan 2018 2:02 pm 

    Greg

    Toughen up you pussy! OMG Someone died of cancer! i need to talk about on a doomer blog to get some attention.You are pathetic loser! And trust me you will see some death coming in a few years! LOL The world is a much better place without your paranoid God head believing friend! Only reason morons like you and your friend are alive anyways was fossil fuels! Without them you would have never been bright enough to make it in the tribes!

  24. Mad Kat on Mon, 29th Jan 2018 5:03 pm 

    Greg, there was a point where I thought Davy/Mm/et al* had some humanity and sanity, but now I know different. They no longer exist in my world. Perhaps if we ALL ignore the delusional Davy/MM/et al, they will go away. That is my plan. If you don’t feed the beast, it will go away or die.

    *et al meaning: and others. M-W

  25. Davy on Mon, 29th Jan 2018 5:14 pm 

    Shut up billy you are such a dork. Leave your faux emotional shit at the door and talk some real talk. This forum is not for seeking sympathy. We are not Ann Landers. We all have personal criisis. Go to a place where people talk about grief issues. You are the horrible person talking about Americans waking up to a 3:00am to a NUK attack. You gloat over the thought. You love the idea of Americans committing suicide by opioids. You then have the bold face to act like you have any humanity in you. You are completely disgusting and I plan on doubling my efforts to hound you.

  26. onlooker on Mon, 29th Jan 2018 5:15 pm 

    Yes, I must concur that the qualty of conversation has dramatically fallen here due mostly to instigation from DAVY/MM. It would be best to ignore them.

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