The latest update to the Brookings-Financial Times TIGER (Tracking Indices for the Global Economic Recovery) Index reveals a global economy that appears to be approaching another stall. Stagnant low growth, risks of deflation, and weak consumer and business confidence characterize the world economy today. With the exception of the U.S., U.K. and India, there are few countries where short-term growth prospects look encouraging.
Eswar Prasad, myself, and Arnav Sahu update TIGER twice a year, around the times of the IMF-World Bank Meetings of finance ministers, central bank governors, economists and policymakers. TIGER is a set of indices that track the speed of economic activity across the world’s major emerging markets and advanced economies using macroeconomic, financial and confidence indicators.
The April 2015 update to TIGER can be viewed interactively at Brookings. Simply click on a country to see how its economy has been broadly performing. Below the map, you can view how each indicator has behaved across the emerging markets group and the advanced economy group (e.g. export growth across emerging markets as a group).
Here are some highlights:
- Slowing employment growth in the U.S. suggests that the persistent strength of the U.S. dollar and the burden of carrying the world economy on its shoulders might be slowing down U.S. momentum.
- In tandem with low oil prices, QE has helped stave off recession in the Eurozone, although growth remains mostly tepid or nonexistent outside Germany and Spain.
- China’s economy is facing a broad slowdown, but the government has enough policy space to maintain growth at around 7 percent for the next couple of years. The government appears committed to financial market reforms, which remain essential if China is to rebalance its economy to a more sustainable growth model.
- India remains a bright spot among the emerging market economies, although the pace of reforms and the durability of growth remain significant elements of concern.
- The main theme for 2015 seems to be that things could be worse rather than that better days are ahead. The urgency of structural reforms seems to have dissipated, with many economies relying on loose monetary policy and weak exchange rates to prop up growth and counter deflationary pressures. In the absence of a strong revival of domestic demand supported by a more balanced set of policies, a robust and sustained global economic recovery will remain elusive.