New data from IHS Global Insight, Lexington, Mass., suggests that over the past two months the recession in the United Kingdom has ended, there's a slightly milder recession in the Eurozone, and the pace of recovery in the United States and China is picking up. The IHS forecast of global growth is essentially unchanged from last month, with real GDP now projected to rise 2.5% in 2012, 2.6% in 2013, and 3.5% in 2014. Barring any major shocks, IHS Global Insight expects global growth to gradually accelerate during 2013.
The economic forecasting firm also expects the mild Eurozone recession to continue into 2013 before a weak rebound in 2014. Meanwhile, the UK economy can be expected to accelerate gradually over the next two years. Greece, Italy, Portugal and Spain will remain deep in contraction. Unfortunately, economic collapses in Southern Europe have begun to infect Northern Europe. Against this backdrop, the Eurozone debt crisis drags on.
Bottom line. The good news is growth in the global economy seems to have stabilized, despite the ongoing recession in the Eurozone and the apparent triple-dip in Japan. Assuming the U.S. economy does not go off the fiscal cliff (or at least not for very long) and assuming no other major shocks (e.g., a major conflict in the Persian Gulf), then the stage seems to be set for a gradual rebound in global growth, driven by the United States and China.