Economic Crisis to Stump Latin American Growth

UN Economic Commission for Latin America and the Caribbean (ECLAC) has released a report warning that growth in regions of Latin America will see a further dip going from 4.3 percent in 2011 to 3.7 percent in 2012.  Of course, not all nations are facing the same economic and political plight.  The significantly complicated state of the global economic environment, in particular the deep crisis of the Eurozone, most certainly impacts this region on "the real channel - exports, prices, foreign investment, remittances, and tourism - and the financial channel".  It is essential to look at the economic performance of developed nations, for a fall in activities could lead to a fall in demand for goods, thus negatively affecting regional exports and price of principal export products.

ECLAC presented some economic policy challenges that include:

• preparing for eventual deterioration of the international situation as a whole
• considering possible sudden changes and delay of the impact of macroeconomic policies
• designing a fiscal policy package for the protection of jobs

With these predictions in play, what will become of these Latin American nations?

-Georisa Chang

SOURCE: UN News Centre

Global Poverty & U.S. Jobs

Top business professionals and political leaders alike believe that allocating the necessary funds to help the world's poor will create potential consumers of U.S. goods and products. The assistance we provide for these growing economies will help the U.S. economy as well as create job opportunities domestically. The return on this investment certainly promises a high reward in more ways than one.

"Your future is in the global economy."

-Tom Donohue, CEO and President of U.S. Chamber of Commerce

-Georisa Chang

World Is Moving From Mostly Poor to Mostly Middle Class!

India started off the 21st century with a boom by opening with the "Incredible India" campaign. The campaign was established to attract tourists from across the globe. But unexpectedly, instead of international travelers showing up, Indians did! Due to the explosive economic growth a new domestic middle class has established itself. And they have become a powerful in the markets abroad. They now outspend Americans in London.

The surprise of the "Incredible India" campaign is not limited to India though. The whole globe has witnessed enormous growth. The surge of prosperity has rapidly increased the global middle class. In fact, by 2030, the global middle class is estimated to double in size. By 2022 the world will for the first time move from being mostly poor to mostly middle class.

Asian countries especially are predicted to witness an increase in their respective middle classes. Experts say that they will constitute as much as two-thirds of the global middle class within the coming decades. This could likely shift the balance of economic power from West to East. To illustrate this, a study completely recently found that in a mere seven years China has gone from buying one General Motors vehicle for every ten sold in the US to becoming the largest customer. Their middle class ranges from 157 million to more than 800 million (second only to the US) and drives consumption allowing for the 15 percent growth rate in retail sales that China has witnessed.

There has not been a surge like this since the Industrial Revolution! The global dynamic is changing as the developing world moves forward. Brazil has increased its minimum wage and India has reduced tax rates to boost incomes. Foreign investment has been giving more people salary jobs, which is driving the demand for consumer retail, health and education in many countries. Companies are beginning to sell into emerging markets and are innovating to create market growth. China, India and Brazil are projected to compete with the worlds top five economies by 2050.

This story of upward mobility is a global story. Today's explosion of the global middle class has spurred an increase in economic, political and personal freedom and has created new opportunities for local entrepreneurs and multinationals.

-Gabrielle Gurian

SOURCE: MSNBC NEWS

Good News For African Economy

The World Bank raised its forecast for economic growth in Sub-Saharan Africa in 2011 as the global economy recovers. In June 2010, the Bank had forecast that the growth will pick up from 4.7% to an estimated 5.1% this year. But with the global economic recovery, the Bank is expecting a further rise in the growth to 5.3% especially for the oil-producing nations, Nigeria and Angola.

The biggest economy in the continent, South Africa is expected to expand to 3.5% this year and 4.1% next year because of an increase in consumer spending and government spending on infrastructures. But the appreciation in South African rand remains a big challenge for South African export. The second biggest economy in the region and the largest oil-producing nation, Nigeria also shows great improvement in their economic performance. Continued growth in its non-oil sectors and government spending is helping Nigeria to a growth of 7.1% from a previous estimate of 5.7%. Other oil-producing nations such as, Angola and Ghana are also following the same path.

In the Eastern region, Kenya is showing positive growth as East Africa's biggest economy. But the biggest challenges to growth in this region are still the prospect for another recession and the incident of political turmoils. If Africa can surpass these hurdles in the coming year, the economic outlook of the poorest continent is surely expected to change for better.

-Nisha Noor

SOURCE: BLOOMBERG