GLOBAL ECONOMIC MONITOR
19122014
November 2014
The month of November was marked by high-level inter-governmental summits and meeting. Most crucial meeting was held between the member nations’ of World Trade Organisation (WTO), who have agreed to adopt the decisions related to public stockholding for food security purposes, the Trade Facilitation Agreement and the post-Bali work. At regional level, the 18th Summit of the South Asian Association for Regional Cooperation (SAARC) was held in Nepal wherein an important agreement was signed on energy cooperation.
The OECD in its Economic Outlook for November 2014 highlighted that the prolonged stagnation in the euro area could drag down global growth and have knock-on effects on other economies through trade and financial links. It has projected global growth to reach 3.3% in 2014, 3.7% in 2015. In addition, OECD’s Composite Leading Indicator (CLI) said that India was the only major economy where the CLI pointed towards pick-up in growth momentum.
The slowing global growth was also reflected in the global manufacturing & services sector activity, as represented by Purchasing Managers’ Index (PMI), wherein the final quarter saw global economic growth to slow-down for the third consecutive month. As a result, global output growth also slowed to its weakest point since April 2014 in both the manufacturing and service sectors, reflecting weaker rates of increase in new business.
On price front, all major commodity prices exhibited a downward trend, with Crude Oil prices falling down to US$75 per barrel in addition to decline in prices of precious metals. This low commodity price environment has put inflation in both high-income and developing countries on a downward path. Unemployment scenario remained stable in most major economies with exception of Russia and Japan .
Policy rates remained predominantly unchanged in most of the major economies including Canada , India and China . While the Bank of Japan (BoJ), unexpectedly eased policy with a significant increase in its bond purchase program.
Warm regards,
Dr. S P Sharma
Chief Economist
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