Sluggish global economy stares at fiscal cliff
India and China will be key for the global economy to grow by even a modest three per cent in 2013, after bouts of debt turmoils across continents pushed it to fiscal precipice and an anaemic growth rate in 2012 left policymakers and politicians at crossroads.
Coined by the influential US Federal Reserve chief Ben Bernanke, 'fiscal cliff' -- better described as a combination of spending cuts and tax hikes -- seems to be the lingo for problem-ridden world economy in the New Year.
If emerging markets such as India and China grappled with spiralling inflation and risks of asset bubbles, the US and Europe remained almost stagnant despite record low interest rates in 2012.
Adding to the economic gloom, the 17-nation euro zone, a grouping of nations that share the common currency euro, continued to be bogged down by debt crisis which also took roots in Italy and Spain while suffocating Greece.
Though slow revival is happening in some emerging economies and developed nations, as the International Monetary Fund (IMF) recently said, "the outlook for growth remains weak with appreciable downside risks".
Going by IMF projections, the world economy is likely to expand 3.3 per cent this year, way lower than 3.8 per cent growth seen in 2012. The other projections call for a growth rate of 2-3 per cent for the global economy in the new year.
To start from Europe, the epicentre of debt crisis, the economic situation is jittery and the euro zone has again slipped into recession -- generally
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