In this week’s Economic Report, Dr. Rick Harper discusses the latest report from the International Monetary Fund (IMF) projecting economic growth for 2014.
“It’s down somewhat...and a little disappointing” says Harper, noting IMF’s world GDP growth forecast of 3.4 percent for the remainder of the year. That's a little better than the 3.2% the world economy managed in 2013. However, their April forecast had been 3.6%. “So it’s a slight slowdown and we’re seeing that in a couple of different countries.”
China saw a slight drop to 7.4% from the 7.6% economic forecast in April. That, by far, leads the way over the UK, where IMF expects a slight increase to 3.2%. The new forecast for the US dropped to 1.7 percent.
Harper referenced the weak first half of the year in the US. “We had that dismal first quarter, negative 2.9% GDP growth and it’s hard to bounce back from that, even though we’re getting better growth and performance in the second half of the year.”
Overall, Harper says the report reflects expectations for lower growth across the globe, particularly in Russia, where the IMF projected a decline in economic growth from 1.3% in April to just .2%. Current tension between Moscow and the West over the crisis in Ukraine is affecting business confidence in Russia. Also, he notes that the country faces ‘severe demographic challenges’ with a low birth rate, or ‘replacement rate’ as economists like to call it.
Additionally, Harper discussed the latest jobs report in Florida. He says the past year (June to June), has been a bright picture, particularly in Okaloosa County. “Okaloosa hit a milestone. They are now over 100,000 jobs in the local area unemployment statistics,” says Harper “relative to June of 2013, they gained about 2,900 jobs.”
Escambia gained 2,200 jobs and Santa Rosa gained about 1,200. That’s about 6,300 jobs in the three-county area, which Harper describes as “impressive.”
On the unemployment front, it’s dropping, although not at the same rate as job growth in the area. “That’s actually a good news story,” says Harper. He explains that people, who had been on the sidelines, sitting out the labor market, are now active participants once again. “That’s because they see that the opportunity is there which could lead to employment.”
Dr. Rick Harper is director of the University of West Florida Office of Economic Development and Engagement; email@example.com.