A decade after the world fell into a devastating economic crisis, it has finally reached a turning point for a revival. The main economies of the planet are expanding and a wave of growth is creating jobs with which the luck of the people begins to improve and the fears of popular discontent are tempered.
There is not a single generalized explanation about how the world finally escaped the global recession. The momentum in the United States is partly due to increased government spending during the Barack Obama administration and a recent tax cut of $ 1.5 billion. In Europe it seems that the effects of the central bank issuing so much money were finally felt.
In general terms, the improvement is due less to the fact that a new source of wealth has been found than to the simple fact that many of the destructive forces that toppled growth have finally run out of power.
The global recovery is far from having an accelerated pace and geopolitical risks threaten to end it. Many economists are skeptical that the benefits of growth go beyond the educated, wealthy and politically connected class that has captured most of the booty in many countries, while much of the working class and other workers have lagged behind. stagnant wages despite the fact that unemployment rates have plummeted.
Even so, the fact that the economy of the important areas of the globe is expanding is a source of optimism. There is no guarantee that this expansive phase will bring greater economic equality; however, it now feels similar to the start of an evolving growth that will bolster wages and increase the security of middle-class lives.
“Now the world depends less on a few stars,” said Barret Kupelian, senior economist at the London office of global accounting and consulting firm PwC. “If something bad happens in an economy, the fact that global growth has spread gives assurance that this is more sustainable.”
The United States, the world’s largest economy, is in its ninth year of growth; The International Monetary Fund has raised its expectations of expansion to 2.7 percent for this year, when earlier it had forecast 2.3 percent, due to tax cuts.
China has allayed fears that there was an abrupt interruption in its growth trajectory, which has been going on for decades. Europe, until recently dismissed as anemic and affected to a point beyond remedy by political dysfunction, is emerging as one of the leaders of growth. Even Japan, synonymous with decline for a long time, is now expanding.
The rise in oil prices has given encouragement to producers in Russia and the Middle East, while Mexico has so far overcome fears that the trade rhetoric of the Donald Trump government will negatively affect its economy. Brazil, which still suffers the effects of an economic depression, shows signs that it is recovering.
The result is a hopeful recovery, although fragile and vulnerable to the increasingly unpredictable preferences and decisions of world leaders.
The threats of nuclear annihilation exchanged by President Donald Trump and North Korean leader Kim Jong-un have sown fears. The pending departure of the United Kingdom from the European Union may end up happening without an agreement for all the issues under discussion, which would subject Europe to a great uncertainty about the rules of trade, especially in the field of finance. In addition, the confusion generated by Trump’s intermittent promises to end the North American Free Trade Agreement ( NAFTA ) while unleashing a trade war with China feeds the risk of derailing growth.
“We used to operate under the idea that Western markets are politically stable and border markets are risky,” said Martin Scheepbouwer, executive director of the OLX Group, which operates online advertising platforms in 41 countries. “Today, with brexit in Europe and the presidency in the United States, there is a new level of instability that hangs over the economy. That is something that worries us. ”
The world economy is expected to grow 3.9 percent this year and next, according to the IMF, compared to 3.7 last year and 3.2 in 2016. This is positive. However, in the years before the crisis, global growth generally exceeded four percent.
The World Economic Forum recently published an assessment of risk factors, based on a survey of a thousand experts, in which 93 percent of respondents observed a greater threat of political or economic confrontations. About 79 percent were concerned about the increased likelihood of a military conflict and 73 percent saw an increase in the risk of erosion of global trade rules.
The report also warned of rising economic inequality, growing threats to cybersecurity and the increased incidence of extreme weather fueled by climate change.
“Many of these risks are becoming increasingly systemic,” said Margareta Drzeniek Hanouz, an economist at the World Economic Forum, adding that they threaten to bring “catastrophic consequences for humanity and the economy.”
Although global companies are cautiously optimistic that good times can last.
In Poland and Brazil, online job listings are increasing, according to OLX, a clear indication of growth. Across Europe, real estate advertising for homes for sale has more than doubled that of rental properties, another sign that people operate with more money. As the recovery has spread, factories in Eastern Europe have been filled with orders. Automotive plants in the Czech Republic, Slovakia, Poland and Romania are sending more cars to Germany, France and the Netherlands.
“We are investing heavily in Asia and also in Africa, because the population growth there is stronger,” said DMS executive director Feike Sijbesma, a Dutch multinational company that manufactures food products and has just opened a factory in Rwanda. “Africa, which was always the forgotten continent, is no longer”.
The favorable situation in Europe and the growth of the United States have also led to the Chinese industry having a still frenetic activity to meet the demand for products, from auto parts to tools and clothing. More factory production has raised prices of raw materials and increased the income of copper producers in Chile and Indonesia, gold mines in South Africa and silver operations in Sweden.
The biggest worry comes from Washington, where the Trump administration has often promised to punish Mexico and China for their unbalanced trade balances with the United States.
“You get into a commercial war, that’s the real concern,” said Ben May, a global economist at Oxford Economics in London. “The impacts on global growth would be quite severe.”