Okay, I am not an economist; I don’t even have an MBA. Under qualified to comment? More apt to do so? Who knows.
Anyway, here are three simple graphics which outline what’s going on world-wide, economically speaking.
Maybe not your usual property-related post, but we think it is important to air some of the more helicopter stuff as well.
- World economic growth is expected to improve, back to long-term trend, over the next couple of years according to the IMF. Emerging & developing nations (read Asian) plus to some degree a re-emerging USA, are the key engines to that growth.
- Whilst the recent results of China (assuming one can really believe them) show a slowing in their economy, growth there is expected to range from 7.5% to 8% in coming years. Economists like to quote something called the Baltic Dry Index (yawn…) when discussing world trade & the health of nations. Without boring you to more tears, this index has been moving up during 2013, more sharply of late, which suggests that world trade is increasing. So maybe the IMF’s has got it right.[sam id=31 codes=’true’]
- When it comes to contribution to economic growth, everything is China, China & China. They account for a third of the world’s economic growth. Second, with a 1/8 of the world’s economic growth is the USA. Next comes Japan. Then, well not much. Australia’s contribution was just under 2%. Not bad given our size, isolation & governance at the time.
- Yet the largest economy in the world, and double the size of China’s, remains the USA. The European Union, in total, is about the same size as the US economy. Australia’s economy, as measured in $US is about 1,500 billion. Whist China is a growth economy, if America sneezes we all catch a cold. A strong world, economically, requires a strong US economy. Things are improving there – US ‘taper’; u/e falling; fracking & a housing upturn. Even some half decent movies are coming out of Hollywood these days.
I will leave you with these observations:
- An economist is a man who knows a hundred ways of making love but doesn’t know any women.
- Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.
- An economist’s guess is liable to be as good as anybody else’s.
STATS: Our quick grab of the just released property-related statistics.