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Global Economic Outlook 2011
In Retrospect, 2010 was a year of Uneven Transition from Economic Recession to Recovery. While The Advanced Economies ARE grappling with Subdued Growth and high Unemployment, Inflation and signs of Overheating are The ConcernS for Emerging Economies. B&E analyses The Outlook for 2011.
Issue Date - 17/02/2011
Slowing economic recovery

The World Economic Situation and Prospects (WESP) 2011 report categorically states that the road to recovery is long and bumpy. A simple analysis of the prevailing economic activities makes it clear that the waning cooperative spirit among major economies, the uncoordinated economic responses despite promises made for a coordinated approach at various global summits (e.g. G20) have undoubtedly been the source of turbulence and uncertainty in the global financial market. The need of the hour is an efficient set of comprehensive and robust actions to overcome sovereign and financial troubles in the euro area. The emerging economies on their part must complement the efforts with policies, which will keep the pressures of overheating in check.

The achilles heel of recovery

It is a general perception among economists that the recovery in growth and jobs from financial crisis are slower than the bounce back from other types of recessions. If statistics are to be relied upon, then between 2007 and 2009 around 30 million jobs were lost globally. The cost cutting austerity move undertaken by economies will only hurt the employment rates further. If the current rate of employment growth is taken as a standard then 22 million jobs will have to be created in order to return to the pre-crisis era. With constrained employment growth, it is feared that cyclical joblessness will become structural. The consequence for the same will be that some of those without work might never be a part of the labour force again, which will further dampen growth.


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