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Dangerous Perception that World Economy is Improving

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By: Elena Grace Flores

RSA-The Economist Debate
RSA-The Economist Debate (Photo credit: cybaea)

The world economy has been filled with positive reports and forecasts that inflation rate is declining and that foreign investments are coming in and so on. Yet despite of these positive thinking efforts, the expectations still fall short – to the verge that positivity itself has now become dangerous. Read this alarming news:

 

Why optimism may be bad news

By: The Economist

ALMOST every year since the end of the financial crisis has started with rosy expectations among American forecasters, and this one is no different. Stockmarkets are buoyant, consumer confidence is improving, and economic seers are raising their growth forecasts for 2014. America’s S&P 500 share index is at a record high, after rising 30% in 2013—the biggest annual gain in almost two decades. Powered by America, global growth of close to 4%, on a purchasing-power-parity basis, seems possible. That would be nearly a full percentage point faster than 2013, and the best showing for several years.  http://www.economist.com/news/leaders/21592613-good-news-about-global-growth-risks-pushing-interest-rates-up-and-politicians-appetite-reform


This is so because the government’s tasks in powerful countries are comprehensively long – but politicians would prioritize tasks that have impacts on their votes rather than create long-term reforms. This is why in America for example, their unemployment and disability issues are still big problems. Same as in the U.K. with the extremity of the rise in house pricing. European countries are still buried in debts. For sure, each individual regardless of your citizenship is feeling this financial strains!

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