Global economy to grow even faster: institute

By Bernie Su, Special to The China Post

TAIPEI, Taiwan — On the basis of data from international research institutes, Academia Sinica on Thursday said its forecast for the world’s economic growth rate between 2014 and 2015 was much higher than the previous two years. Academia Sinica held a press conference to present its 2014 economic forecast, yesterday. The report points out that the IMF, World Bank, Organisation for Economic Co-operation and Development (OECD), and other international research organizations all predict global economic growth will increase consistently, compared with last year. Affected by severe winter weather, the U.S. saw negative 2.9 percent GDP growth in the first quarter. Nevertheless, economists regarded it as a short-term phenomenon, and believe the economy will improve in the second quarter. The IMF forecast that the U.S.’ GDP growth will achieve 3 percent in 2015. A third round of quantitative easing (QE3) was launched in order to boost the economy and to improve the U.S.’ stock market. Under the premise that the U.S. economy continues to improve, the Federal Reserve may end its debt purchase plan in October. However, the U.S. financial market has not reacted to this possible development, and the scaling down of QE3 has not affected market confidence, said Academia Sinica’s economic research fellow Ray Chou (周雨田).

In addition, the U.S. housing market has regained momentum, while the unemployment rate declined to 6.1 percent. It was the lowest on record since the beginning of the Great Recession. Economists forecast that the Fed will start to raise interest rates in June of 2015.

The European Union’s financial market has shown sustained improvement, as indicated through the purchasing managers index turning for the better, and declining government debts. The IMF forecast that the EU’s GDP will grow 0.3 percentage points to reach 1.5 percent in 2015. However, the EU’s employment rate only showed slight improvement.