{"id":792,"date":"2012-01-20T01:01:23","date_gmt":"2012-01-19T15:01:23","guid":{"rendered":"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/?p=792"},"modified":"2012-01-19T10:13:00","modified_gmt":"2012-01-19T00:13:00","slug":"world-bank-forecasts","status":"publish","type":"post","link":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/blog\/2012\/01\/world-bank-forecasts\/","title":{"rendered":"World Bank forecasts \u2013 what does it mean for Australia?"},"content":{"rendered":"

\"\"<\/a><\/p>\n

Tim Harcourt<\/strong><\/p>\n

The World Bank has warned that the world risks a deeper recession than the GFC in 2008-09, and economic forecasts for the whole world have been downgraded.<\/p>\n

A\u00a0threat of recession from Europe is unnecessarily affecting Australia\u2019s global prospects.<\/p>\n

We need to ensure that fear of a double dip recession doesn\u2019t become a self-fulfilling prophecy. Europe has its debt problems, but Australia\u2019s economic fundamentals are sound and much of our trade ties to China, India, ASEAN and the emerging economies are based on energy, food, and major industrial and infrastructure needs. The long term demand fundamental will out swamp the short term jitters in financial markets.<\/p>\n

I have just returned from China and India en route to Brazil, and\u00a0in these countries it is clear\u00a0there is a real danger in a spill-over from Europe\u2019s debt problems and slowdowns in key countries such as India that threaten growth.<\/p>\n

The World Bank slashed India\u2019s forecasts from 8.5 per cent to 6.4 per cent, yet India\u2019s trade exposure to Europe is less than China\u2019s. In addition, both China and India now have large affluent domestic consumer markets that will help stem the European tide. Even before the collapse of Lehman Brothers, global economists knew that America had \u2018too many shoppers and not enough shippers\u2019, whilst China had \u2018too many shippers and not enough shoppers\u2019.<\/p>\n

The US-based World Bank says that after six months of slowing economic activity, growth in the global economy is likely to be 2.5 per cent in 2012 and 3.1 per cent in 2013. It warns that Asian growth nations fuelling Australia’s prosperity could be dragged into the mire, in a move that would have severe ramifications for the domestic economy.<\/p>\n

As these global structural imbalances are addressed, and China moves its economy from export dependence to domestic consumption and investment, we\u2019ll see a natural movement to the emerging economies away from the northern hemisphere. For Australia that will be good news as the countries in our region will do more of the heavy lifting in terms of global growth and the famous \u2018tyranny of distance\u2019 will be replaced by the \u2018power of proximity\u2019.<\/p>\n

Tim Harcourt is the JW Nevile Fellow in Economics, Australian School of Business, UNSW and author of The Airport Economist<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Tim Harcourt The World Bank has warned that the world risks a deeper recession than the GFC in 2008-09, and economic forecasts for the whole world have been downgraded. A\u00a0threat of recession from Europe is unnecessarily affecting Australia\u2019s global prospects. We need to ensure that fear of a double dip recession doesn\u2019t become a self-fulfilling […]<\/p>\n","protected":false},"author":336,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-792","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/users\/336"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/comments?post=792"}],"version-history":[{"count":1,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/792\/revisions"}],"predecessor-version":[{"id":793,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/792\/revisions\/793"}],"wp:attachment":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/media?parent=792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/categories?post=792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/tags?post=792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}