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See what is missing to the Global Economics take off in 2015
The IMF lowered its forecast for global growth in 2014 to 3.3% (0.4% less than in April) and 3.8% in 2015

The global economy continues without taking off. The International Monetary Fund (IMF), which in January 2014 predicted a strong global recovery; however it was moderating controlling his optimism throughout the year. 

Europe: Euro zone does not go to recession, says the European Commission President. 

In its latest report, the agency lowered its forecast for global growth in 2014 to 3.3% (0.4% less than in April) and 3.8% in 2015. However, the market is more pessimistic. 

The US investment bank, Goldman Sachs, predicts that the global economy grew 3% in 2014, and may grow 3.4% this year. The Unit Economist Intelligence (EIU), consultancy linked to the British magazine, The Economist, calculates the growth rate of 2.2% in 2014 and 2.9% in 2015. 

"Compared to the 2008 financial crisis, the scenario for 2015 is not encouraging," he said to BBC World, the Spanish service in BBC, Mike Jakeman, Global EIU analyst. 

"The reality is that we are starting this year with the same doubt we were in 2013 and 2014: will the global economy take off this year or not?" he says. 

One difference from the previous years is that 2015 starts with the price of a barrel of oil nearly half it was in 2014. 

In mid-December the price per barrel fell down from US $ 65 (US $ 170) and, according to many analysts, it may fall to $ 50 (US $ 135) in the first half of 2015. 

The scenario is discouraging for the exporters of raw materials, such as Russia, Ecuador and Venezuela, for the shares of the oil companies and the balance sheets of banks exposed to these companies. But throughout the world, the effect tends to be positive. 

In the 70s and 80s, the high price of oil caused global crises. In the late 20th century and early 21, the oil at low levels, the world economy grew. It is expected, therefore, the price of the commodity remains close to current levels, some analysts say. 

But the oil is not the solution to all problems: the growth of the global economy does not depend on its price only. 

"We estimate that for every 10 cents less in oil prices, the world economy grows 0.1%. If the price of the barrel remains at that level, the impact on the economy will be 0.3%. It is a positive factor, but does not solve all global economic problems. Even in a free trade zone such as the European Union, it may be a counter-productive deflationary effect", said Jakeman to BBC World. 

The countries of the European Union (EU) that adopted the euro as their single currency is part of the solution to the economy starts growing again this year. The ideal solution for the global economic recovery is that the block comes out of the economic crisis. 

In 2014, the euro zone has avoided recession. But in November, the European Commission itself lowered the growth forecasting for 2015 from 1.7% to 1.1%. 

One of the greatest risks faced by the block, is the deflation, for instance, the population stop buying for a while, waiting for lower prices again, what leads to the bankruptcy of the companies and unemployment. 

The euro zone is using the lowest interest rate in its history (0.2%) and slowly began a monetary easing process, through which prints money daily to provide liquidity to the market and stimulate consumption. However, nothing seems succeeding. 

"In this sense, the lowest price of oil has a side effect, because it will contribute to price deflation. And no one knows the impact a monetary issue will cause. Unlike the US, the measure was not taken in the necessary scale and speed", said Jakeman. 

Together with the economic uncertainties is the political unpredictability. 

The early elections in Greece, which will be held in late January, can give victory to Syriza, left coalition, which is against fiscal austerity. Analysts fear such a scenario is confirmed, the country is likely to stop using the euro. 

"The Syriza might not even want to leave the common currency, but its economic program is incompatible with the ruling order in the euro area. In addition, 2015 is an election year in several EU countries, which can lead to unstable governments", says Jakeman. 

In addition to elections in two peripheral countries of the euro zone, such as Portugal and Spain, there are fears that other nations that use the common currency, but economically more powerful, can also come to leave the block. 

The United States 
Unlike the European Union, the United States is recovering at a faster pace. In the second and third quarters of 2014, the country increased 4.6% and 3.5%, respectively. The world economy would benefit from a repeat of this performance in 2015. 

The development of dozen of thousands jobs have been crucial for the US economy, which performance has global implications. 

"We believe that the US economy will continue to grow at this pace. Every month in the last ten months, the United States have developed more than 200,000 jobs opportunities. This is very important for an economy where domestic consumption accounts for 70% of GDP", says Jakeman. 

The biggest economic optimism caused the US government close down in 2014 the monetary easing program ("quantitative easing" or simply "QE", in English) started shortly after the financial crisis of 2008 with the Lehman Brothers bankruptcy. 

As usual, the recovery of the US economy tends to produce strong impact on developing countries. After all, when "America sneezes, the world catches a cold". 

Brazil was, for example, one of the first to feel the side effects of the American economy recovery. The Brazilian currency, the real, fell 40% against the dollar in the past six months. 

"The appreciation of the dollar will continue, because the expectation is that the US central bank increases interest rates in 2015. As a result, investors tend to get rid of their assets in emerging countries and come back strongly to the United States. This redirection of resources shall affect the value of the currency of those countries as we saw two years ago", explains Jakeman. 

"I do not think there will be a financial chaos due to this process has been occurring gradually", he adds. 

China and Latin America 
Due to Japan recession, China has established as the second largest economy in the world. At the same time, the country changed its growth standard, it dedicated exclusively to exports in the past. Today, the relationship is already more balanced and foreign sales compete with the domestic consumption. 

The price of this change is that instead of double-digit growth, China will grow "only" 7.3%. And although it does not fall down 7 percentage points, the country will continue to be one of the engines of the world economy. 

However, some analysts fear an "emergency landing", with a possible drop of more than three percentage points in GDP in China, which would generate strong political and economic tensions. 

According to this view, excessive government stimulus applied after the 2008 crisis, generated bank debts and unsustainable real estate, which should, in turn, raise a cycle of bankruptcies, equivalent to the crisis "subprime" in the United States in 2007-2008. 

According to John Ross, senior economist at Chongyang Institute of Renmin University in Beijing, this hypothesis does not take into account the actual functioning of the Chinese financial system. 

"This is a state financial system. The state sector is lending to the state sector: He is both debtor as creditor. The reality is throughout 20 years it has been announced a collapse of the Chinese economy and has not happened. Today, the discussion in China is whether the country will grow 7.5% or 7%. A crisis is ruled out", said Ross to BBC. 

Good news for the Latin American countries that have grown in the last decade thanks to the sale of raw materials to China and the wave of Chinese foreign investment. 

Although fallen in recent months, the commodity prices are still at a high level. 

According to ECLAC, the Latin American economy may grow twice this year of 2014, from 1.1% to 2.2%. 

The EIU, from the Economist, is slightly optimist on its estimate (2.6%), indicating that the region must intensify the use of economic alternatives to compensate for the new international conditions. 

"Latin America should encourage more domestic consumption to meet both the commodity price decline as the rise in US interest rates," concludes Jakeman. 

Source: BBC Brasil
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