QNB Expects Global Recovery to Falter in 2014-1

The decline in global trade seems to be continuing, the report said. For example, the US economy contracted by 1% in the first quarter, partly reflecting a large decline in net exports. In Europe also, growth for the same period was registered at a weak 0.2% as large exporters like Germany suffered from the decline in Emerging Markets export demand. China as well struggled with growth during the first quarter of 2014. QNB suggested that decline in global trade could continue for the remainder of 2014.

If the trend continues, the bank added in its statement, “a further decline in world exports would be worrisome as the only way to sustain the global recovery over the medium term is for global trade to resume its strong growth prior to 2007.” At that moment central banks will find it difficult to affect dmoestic demand via monetary easing for the medium and longterm.

“What is even more worrisome is that weaker global growth seems to become entrenched as prolonged low levels of economic activity are having an impact on the long-term potential growth that economies can grow at,” the report added. (END)

Leave a Reply