Economic Projections: How Will the World Perform This Year?

Source: http://www.flickr.com/photos/biggolf/

Both Britain and Germany look to have a solid year ahead with the United States just a tad ahead. All three will likely continue to struggle with inflation, but will manage to stabilize interest rates, and see improvement in growth — according to Reuters poll forecasts. Not all nations are looking at good economic sailing weather though, the polls show, and Japan looks as though it will be struggling in 2014 while the eurozone will quite possibly trudge behind other developed countries.

Unsurprisingly, based on recent speculation, the emerging markets in developing countries will probably run the gambit. One major concern for the coming year deals with deflation, but the International Monetary Fund head, Christine Lagarde, said this week that while she is concerned that there is a possibility of deflation, the economic growth for the coming year looks promising — according to Reuters, which polled a lower likelihood of deflation.

“We’re not forecasting a descent into outright deflation. Instead, we’re highlighting the risk that inflation remains too low, or worse, that it continues to sink over the next two years,” said Stephen King, economist with HSBC, according to Reuters.

The European Central Bank, also known as the ECB, has promised that it will intervene if deflation becomes to serious a risk. “Today’s figures show that it’s to early for the ECB to become complacent about deflation risks, especially in peripheral countries,” said Peter Vanden Houte, a eurozone economist with ING.

As for emerging markets, Mexico looks like its previously poor reform performance may improve in 2014, though it will still see a struggling recovery. Turkey looks to have a similarly hard year in its future, but South Africa’s growth could see improvement, according to Reuters polls. The eurozone looks to have possible low growth coming in 2014, on top of the low inflation concerns.

More From Wall St. Cheat Sheet: