The Strategist

Less than 50% of the world's inhabitants are satisfied with the global economy

06/09/2017 - 14:26

On average, 46% of the world’s citizens assessed the situation in their country's economy as "good", the American research center Pew Research Center reports in its new report. In 17 developed countries, whose residents took part in the survey center, the share of those positively perceiving the state of the economy exceeds the number of pessimists and reaches 51%. The highest rate was recorded in the Netherlands (87%), Germany (86%), Sweden (84%), Poland (64%) and Israel (62%). At the other extreme is Greece (98% of its inhabitants rated the situation as "bad"), South Korea (84%) and Italy (84%).

Bruce Andersen
Bruce Andersen
Only 45% of the respondents ​in 15 developing countries gave a positive feedback on the state of the national economy. At the same time, this indicator correlates little with the standard of living. The most optimistic are the people of India (83% of respondents are satisfied with the situation), the Philippines (78%), Senegal (76%), Turkey (65%) and Indonesia (63%). With regard to negative assessments, the share is highest in Brazil (82%), Venezuela (79%) and Argentina (73%).

Most rapidly in the past two years, the share of optimistic estimates has been growing in Poland (+26 percentage points, etc.), Indonesia (+21 p.) and Ghana (+18 percentage points), falling in Nigeria (- 16 p.), Argentina (-15 p.) and Mexico (-12 p.).

Although in developing countries the share of positive estimates of the national economy is lower than in developed countries, the majority (56%) expect the best economic conditions for their children. The most optimistic outlook for the future belongs to residents of India (76%), Nigeria (72%) and Chile (69%). Only by 34% of respondents in developed economies share this opinion, especially pessimistic are citizens of Greece, Japan and France.

At the same time, the World Bank predicts that a rebound in the growth of trade from post-crisis lows should contribute to the world economy’s growth of the next year to the fastest pace for almost seven years.

However, many risks threaten recovery in major emerging markets and accelerate expansion in rich economies, the bank said in a statement.

The Development Institute forecasts that global growth will reach 2.9% in 2018, compared with 2.7% this year. The stabilization of commodity prices will allow Brazil, Russia, Nigeria and other major emerging markets to exit the two-year recession. Growth in the US and Europe is also gaining momentum, as many of the world's most powerful economies are finally showing signs of quitting the aftermath of the global financial crisis.

Healthier industrial activity, investment and commodity prices contributed to the revival of world trade growth to 4% this year, compared to 2.5% last year, the bank said.

At that, the World Bank also warned that the risks of falling are dominant in most forecasts.

The growing debt of emerging markets, especially in China, the world's second largest economy, can jeopardize global growth. This problem is especially acute in the corporate sector. It may quickly hit the financial sector and state balances, provoke the fall of cross-border orders and the outflow of capital, the bank warns.

While China's credit boom is a focus of global problems, Turkey and large commodity exporters are also vulnerable to falling debt.

The fears of trade wars also exacerbate the situation in the global economy. Banking economists still do not exclude the risk that America First policy of US President Donald Trump's administration can provoke tariff increases and other trade barriers in the US, China and other countries.


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