Current Economic State and 2008-2009
It is about six years since the world experienced the worst global financial crisis in the history of the world economy, however, considerable improvement can be seen by looking at economy of various states all over the world (Irwin, 2013). The economy had a continuous increase of risk in all sector following the failure in housing prices and weak monetary policy of key economies of the world. Risky economy resulted to the sudden change in the lending rates and spending by the households. The effect of these was manifested in the sudden but steady decline in the world per capita.
/>
The current economy has impressive signs of a massive increase in most sectors as witnessed in various economic statuses of most countries. A County such as UK has a projection of its economic growth to grow by 2.5 and 2.1 percent in 2014 and 2015 respectively (Milanovic, 2012). UK’s trade deficit has shown a narrow trade deficit, which is a positive indication to the economic change. Manufacturing of Euro-zone has shown a remarkable growth in January 2014. Even with so many positive indicators in the world’s economy, there is other information that shows that there are possibilities of having the global economic decline in the years to come (Irwin, 2013). However, when looking at leading economies in the world, there are positive indicators that give hope for stability in the global economy in the current year and years to come.
Journey to economic recovery was initiated when the fiscal cliff bill was signed in the United States; tentative growth in US economy has given its signs since the signing of this bill. The consistent economic increase in the euro-zone has led to increase in investors’ confidence level, which is a prerequisite to global economic growth.
World Economy by Region
Examination of US economic status shows that the GDP was $15.66 trillion in the year 2012 (CIA Fact book, 2012). The state was the most prosperous state in all worlds during this period it is because US is ranked third among the highly populated countries in all world after India and China. The country has a population of about 317 million people that need to enjoy the $15.66 trillion of the country’s GDP, which gives a per capita of $49800. This shows that the country’s prosperity per person ranked top in the world (CIA Fact book, 2012). Comparing US statistics with the world’s economy, the population of the whole world by 2013 was 7.095 billion with a nominal GDP being US$ 71.83 trillion in the year 2012, which gives GDP per capita of US$7178. The world’s growth rate rose by three percent according to The World Factbook in 2012. US economy has had a remarkable increase as real GDP of goods and services had an increase of 3.2 percent by 2013 fourth quarter (CIA Fact book, 2012). The result of the third quarter of the country’s real GDP showed an increase to 4.1 percent. Net international investment of US was an increase compared to past records of the early quarter in 2013. US economy has a remarkable growth with the unemployment rate reduced unexpectedly in the last five years. There are other areas where the country face challenges, but the overall economy has since shown a positive change, which also translates to the improvement in the economic level of the world as US, is ranked as the world’s largest economy (CIA Fact book, 2012).
Key Countries That Impact the World Economy
There are those countries that have a direct impact in the world’s economy both directly and indirectly, such that when there is a problem in those economies then the problem is transmitted to the whole world economy. Some of the top five countries that have an impact on the world’s economy are; US, Japan, Germany, France, and UK. These counties, according to the report by the Factbook in 2012, had GDP of $16.02 trillion, $5.88 trillion, $3.383 trillion, $2.579 trillion, and $2.443 trillion respectively (CIA Fact book, 2012). These five countries play a big role in the international political stages and the economic stages as well. US exports more goods as its imports on goods and even services making it one of the largest trading countries in all worlds (Milanovic, 2012). This international trade with the largest economies in the world has influenced the level of world’s production and consumption of goods and services. Big economies specialize in a given area of production, which gives the opportunity to be key players in the global market hence an impact in the world economy. In the past, most trade took place within the people that live in a certain town or country, with improvement in transportation and good communication networks, trade went beyond country borders (Irwin, 2013). The emergence of the industrial revolution brought about remarkable increase in the level of production especially to those countries that embraced it in time such as the big five countries. The world largest economies have their economy equipped with all the factors of production and, therefore; they have the power to control the supply of goods and even services together with the supply of raw material all over the world. The world economy relies so much on these economies such that if anything happens in these economies, the world economy must experience the effect (Irwin, 2013).
Reference
Country comparison: oil proved reserves Access to the CIA fact book. https://www.cia.gov/library/publication/the-world-fact/book/index.html.Retrieved on 9th Feb 2014.
Irwin, N. (2013). Congratulations America. Washington: Nerd Press.
Milanovic, B. (2012). True World Income Distribution. New York: Worth Published.
