What are some of the economic effects of the sharp appreciation of the US dollar and the severe Ebola outbreak in West Africa? These are some of the many economic trends across the globe studied in the latest issue of the World Economic Situation and Prospects (WESP) Monthly Briefing released by UN DESA’s Development Policy and Analysis Division (DPAD).
The briefing highlights that following the financial market turmoil in mid-2013 and early 2014, emerging economies saw a recovery in capital inflows between February and July amid more stable external financial conditions.
It also puts a spotlight on the strengthening of the dollar, reflecting a relatively stronger economic situation in the United States than in a number of other economies. Here, the real gross domestic product (GDP) expanded at a 4.6 per cent annual pace in the second quarter of 2014, which is the strongest quarter since early 2006. Nevertheless, should US exports slow down as they become more expensive, a continued appreciation of the dollar may eventually curb economic growth.
While the Western European economy continues to struggle with deflation and a stagnation of activity, the business confidence of new EU members shows resilience in the face of geopolitical tensions.
Examining developed Asia, the briefing highlights that although China’s GDP growth picked up in the second quarter of 2014, the most recent high-frequency data point to renewed weakness. It also puts a spotlight on the interference of the Reserve Bank of New Zealand (RBNZ) in the foreign-exchange market, the largest intervention since July 2007.
Turning focus to South Asia, the study finds that Sri Lanka remains the fastest-growing economy and that Nepal’s Government signed the biggest foreign investment deal in the country’s history.
For Latin America and the Caribbean, unemployment rate remains relatively low however deteriorating economic conditions in some countries have also led to lower job creation and moderate rises in unemployment.
The Ebola outbreak in West Africa continues to take a severe human toll and creates significant problems for the economies of Guinea, Liberia and Sierra Leone. A total of 13,703 cases have been officially reported so far, with 4,922 deaths. The epidemic has disrupted trade and work in the crucial agricultural sector, while putting an unprecedented strain on national resources.