ARLINGTON, Va. -- Recent data shows that a global economic recovery is in progress, but the rebound will be sluggish, according to the Manufacturers Alliance/MAPI.
MAPI economist Cliff Waldman says "signs of normalization continue to appear in the financial and economic environments," and the world is moving from crisis to some semblance of stability.
“Unfortunately, stability does not necessarily presage strength,” Waldman cautioned. “Two factors in particular are likely to slow the pace of the recovery during the next few years. First, the timing and impact of the withdrawal of historically accommodative monetary and fiscal policies is a tricky issue, as near-zero interest rate policies are unsustainable. Second, it would appear that the U.S. consumer has been financially shocked into a higher savings rate, a positive development for long-run global stability, but one that saps a key source of U.S. and global strength just when it is needed to help pull the world economy out of an especially difficult period.”
MAPI expects the growth rate of total U.S. exports of goods and services to shrink 11.8 percent in 2009, followed by 5.7 percent growth in 2010 and 7.9 percent growth in 2011.
GDP in non-U.S. industrialized countries, including Canada, Eurozone, and Japan is likely to rise from 1.9 percent growth in first quarter 2010 to an average 2.6 percent growth in the second half of 2011.
Developing countries will grow at a faster pace. Aggregate developing country GDP should increase 3.5 percent in the first quarter of 2010, then reach a high of 5 percent growth in the third quarter of 2011 before moderating to 4.5 percent growth by the end of 2011.
The U.S. dollar is expected to fall by 5 percent in the first half of 2010 against the currencies of major trading partners. It's expected to fall 3 percent in each of the subsequent four quarters before declining 2 percent further in the last two quarters of 2011.
Against the currencies of developing countries, the dollar will likely depreciate 8 percent during the first quarter of 2010, with a 10 percent decrease expected in the second and third quarters. Another 12 percent drop is expected in the fourth quarter of 2010 before it moderates to a decline of 7 percent in the first two quarters of 2011.
“Export-oriented nations both in the industrialized and developing world are trying to rebalance the sources of their growth toward domestic demand,” Waldman said. “This may usher in a period of greater currency stability and moderate declines in the dollar.”
For additional information, visit http://www.mapi.net