A lot of people would be busy setting their goals for the upcoming year, but it is important to know where the world will head on the economic front in 2016. Despite all speculations and humongous economic woes, year 2015 has been one of the calmest ones in recent times – the post recession era. Big economies including China and India have successfully taken their GDPs (Gross Domestic Product) to around 7 per cent this year being closely followed by other Asian nations as well.
There is a good indication for the US economy as well since the nation has registered 2.7 per cent GDP growth this year with the possibility of following upward growth trends in the next couple of years as well. However, the future of US economy will actually depend upon the result of the 45th Presidential poll to be held sometime in November 2016.
What The Experts are Saying
According to the World Bank forecast, global economic growth rate is set to achieve around 3.5 percent growth in 2016, the highest in the last five years. If the world achieves even that much expansion in economic growth in the new year it will be a remarkable achievement because the world economy couldn’t take its growth rate to 3 per cent since 2012.
Considering the recent economic improvement that has been taking place across the globe and especially in Asia, the world economy might hopefully come out of the dark days of recession. However, there are still some concerns about the Federal Reserve’s interest rate hike possibility which might result in strengthening of dollar and reduction in imports by the developing nations from the US.
At the recently concluded World Economic Forum (WEF) summit on Global Agenda 2015, the UAE sounded very optimistic about the coming year hinting greater acceleration of financial growth in Asia including the Middle East, India, and China.
World Bank Forecasts and Estimates for 2016: Top 10 Nations
The Conclusion & what’s in Store?
It’s superficial to assume that the World Economy will climb too high in the next year. In fact, it’s the take-off stage and the global economic scenario will improve but only after a couple of years more. Though, the US economy looks much more robust now but it can’t register 5 – 6 per cent GDP growth rate immediately. The US economy will take its own time to reach up to that level.
China’s bit economic downturn in recent times may affect its GDP growth prospect in the coming year. Goldman Sachs has estimated 6.4 per cent economic growth for China instead of 7 % that others are saying. Similarly, Continuous fall in demand and corresponding decline in the level of consumption in Japan is set to hurt the Japanese economy more. A series of further economic reforms is expected in the land of rising sun.
European economy will once again remain volatile due to ongoing the refuge crisis and Greece debt fiasco. These two problems will overall affect the Scandinavian nations and might impede the growth rate in the region in 2016. The effort should be towards implementing structural reforms in developed countries including these ones to infuse new vigor into the European economies.
Russia, on the other hand, may suffer to some extent due to its involvement in Ukraine-Crimea issue and then again its armed fight against ISIS (terror outfit) in Syria. BRIC countries including Brazil, Russia, India and China will be the key to the success of world economy in 2016. These nations account for more than the 60 percent of world GDPs, hence it is important for these countries to consolidate their economies and perform well on the front of economic growth and development to pave the way for a fruitful and prosperous world economy in the forthcoming New Year.