Global growth is set to be “sluggish at best” for the next four years, a top think-tank warns today, prompting it to slash its projections.
In a gloomy prognosis for the world economy, the Centre for Economics and Business Research (CEBR) said the outlook “could well be worse”, as it pointed to the additional risks associated with an Israeli attack on Iran and any fallout from a breakup of the eurozone.
The group’s latest “global prospects” report cuts 2013 world growth to just 2.7 per cent from a previous estimate of 3.2 per cent. Growth for the 2014-16 period has been revised down to 3.2 per cent from 3.5 per cent.
The global economy has been propped up by emerging nations such as China and India, though growth there is now being hindered by weak consumer demand in major Western countries.
Figures yesterday showed Greece mired firmly in recession, with gross domestic product contracting by an annualised rate of 6.2 per cent in the second quarter, compared with the same period a year earlier. Greece’s economy has been stuck in recession for five years now.
It also emerged yesterday that Japan’s economic growth had eased in the second quarter as the eurozone crisis hurt exports and domestic consumption remained subdued.
Tim Ohlenburg, the main author of the CEBR report, said: “An emerging markets slowdown coincides with recession in the eurozone and stuttering progress in the US recovery.
“Both 2012 and 2013 look like difficult years for the world economy.”