Projected Boom For Global Economy,Fueled By United States And China
Countries around the world are going to get quite an economic boost in the next 12 to 18
months, according to the Institute for International Economics’(IIE) “Global Economic
Forecasts”presentation. The U.S.- based IIE is forecasting a global gross domestic product (GDP)
growth of 4.75 percent for 2004 and 4 percent for 2005, with the United States and China providing
the strongest boost.The firm said the U.S. economy is projected to grow 4.5 percent in 2004 and 3.5
percent in 2005. However, despite the rosy forecast, IIE does caution about the risk of rising oil
and natural gas prices, which may pose some risk to the optimistic outlook.
Meanwhile, following the banner year of 2003, China should enjoy a GDP growth of 8.5 percent
in 2004 and 7 percent in 2005. But,“a significant slowdown in the present rapid pace of the Chinese
economic expansion is unavoidable some time soon,” said Michael Mussa, a senior fellow at IIE, in
his presentation. He added that the sooner policy actions, such as an upward adjustment of the
Chinese currency exchange rate, are taken, the better the long-term economic results would be for
China and the world.India, another growing economy, is projected to enjoy a 2005 GDP growth of 6.5
percent.Other emerging economies in Asia also are expected to perform well in 2004 and 2005.
Collectively, they account for about 9 percent of the world GDP. IIE is forecasting 6- percent and
5.25-percent annual GDP growths for this region for 2004 and 2005 respectively.