Tuesday, April 25, 2006
for the past three years, including last year@s sharp slowdown in the British economy, the world economy has been enjoying its strongest and most sustained boom for more than three decades.Even sub-saharan Africa is set for nearly 6% which is pretty bloody amazing. Indeed
In Washington, where the chancellor has been attending the spring meetings of the International Monetary Fund (IMF) and World Bank, the mood is decidedly sunny. Presenting the IMF's twice-yearly world economic outlook. Last week, Raghuram Rajan, its chief economist, said the organisation's global-growth forecast had been revised for this year from a strong 4.3% to a booming 4.9%.
This, he pointed out, would be the fourth year in a row in which growth in the world economy would top 4%, the first time this has happened since the post-war Âgolden ageÂ was coming to an end in the early 1970s.
In fact, growth in 2004 to 2006 will be close to 5%, if the IMF is right in its forecast. The 5.3% growth rate in 2004, as countries shrugged off the bursting of the dotcom bubble and the start of the Iraq war, was followed by 4.8% last year.
It would be fair to say to the world "you've never had it so good"
Europe, indeed, is the missing piece of the jigsaw , which is one reason why Britain, locked to the Continent through trade and other ties, has not prospered as much as might have been expected.In my opinion, for what it is worth,this is being driven what is known as Moore's Law - that computer capacity & to a lesser extent other electronics, double, at a fixed price every 18 months. It is generally accepted, for example, that Africa's growth owes a lot to getting access to mobile telephones! This is not a proveable law it is merely an observed phenomenon since the end of WW2, which computer experts say they expect can continue for immediate future. If so we may expect this growth rate to continue, or even accelerate, as computerisation plays an ever increasing economic role.
Last year's growth of less than 2% in Britain, and a year-long rise in unemployment, suggest that we have picked up some of the slow-growth bug from the Continent. Critics also say Britain is failing to benefit fully from the strength of the global economy because of rising taxes and red tape.
This is one reason why I consider the SNP's target of 4% growth for us, while seen as optimism by conventional UK parties, actually to be pretty conservative. Ireland has managed 7% so I would at least aim at 9%.