Across the world, people, irrespective of their religion and nationality, are all set to celebrate the advent of New Year 2008 with much verve and enthusiasm. All hope for a better future and prevalence of happiness and prosperity in the global family.

Economy Watch wishes you all the best for the forthcoming year. On this occasion, we join the global festivity by presenting to our global audience a short analysis and set of predictions on World Economy 2008.

The world economy is predicted to continue growing in 2008. However, the rate of growth is expected to be lower than the current year. The projected world growth rate for the year 2008 is around 4.8%, whereas the ongoing growth rate for 2007 year end is 5.2%. Central Banks of different countries are expected to stay away from monetary restrictions in the face of inflations. This is expected to contribute significantly to the growth of the world economy in 2008. Also high investment is expected to continue in the year ahead. The most interesting aspect of economic growth in 2008 is the fact that the world economy in the said year is expected to be driven by emerging economies like China and India, rather than by economies of USA, European countries and Japan.

Growth prospects for the world economy in 2008

The slowdown in the world economy in recent times has been attributed to the slow growth of the US economy. Private consumption in the USA has lacked momentum. The Real Estate sector worldwide has faced severe crisis. In the global economy, volatile oil prices, fluctuating financial markets and continued inflation are forecasted to be the major threats to economic growth in 2008. However, the momentum of growth in the emerging economies is an encouraging sign for the world economy. According to IMF Chief Economist Simon Johnson, China and India are expected to make the largest country level contributions to the growth of the world economy. Higher corporate profits, high employment and growing international trade are positive traits prevailing in the world economy which can be expected to continue through 2008.

The performance of the developing countries will remain a key factor in the world economy in 2008. While Emerging Asia (mostly East and South East) is expected to grow at 8.3% in 2008, Africa and the Middle East are expected to grow at 6.5% and 5.9% respectively.

US economy in 2008

The US economy is experiencing low growth rates. By the end of 2007, the US economy is expected to register a growth rate of only 1.9 %, one of the lowest growth rates the United States of America has seen in recent years. Although economists do not perceive the risk of an immediate recession in the US economy, however, lack of growth in industrial production, decline in the real estate sector, slow growth of employment and insufficient business credit are factors that would weigh heavily on the growth of the US economy in 2008. Economists have projected a 3% growth for the US economy in 2008.

Chinese Economy in 2008

The Chinese economy is forecasted to grow at 10.9 % in 2008 which, in spite of a slowdown from 2007, would still be substantial. China’s global trade surplus is predicted to reach the 300 billion dollars mark next year which is a growth of 20%. Inflation of 4.5% is forecasted for the Chinese economy in 2008.

Indian Economy in 2008

A growth of above 8% has been forecasted for the Indian economy in 2008. According to Indian Finance Minister Mr. P. Chidambaram, Indian exports would reach the $200 billion mark in 2008. The growth of the service sector which contributes more than 50% to India’s GDP, the potential of the Indian Stock market and the appreciating Indian Rupee are expected to be major factors in India’s economic growth in 2008.

Japanese Economy in 2008

Growth in the Japanese economy is expected from higher investments and increasing private consumption. The Japanese economy, growing at 2.4 % in 2007 is expected to grow at 2.2 % in 2008

The Middle East Economies in 2008

The Middle East economies are expected to benefit from rising oil prices. An average 5.9 % growth rate has been forecasted for the Middle East economies, while Iran and Egypt are expected to register higher growth rates.

African Economies in 2008

After years of slow growth, the African Economies are gaining momentum and maintaining steady growth rates. The average growth rate of the Sub Saharan African economies, which was 5.7% in 2006, is expected to be at 6.1 % at the end of 2007 and further rise to 6.8% in 2008. The African oil exporting countries like Nigeria and Angola are providing boost to the African economies.

European Economy in 2008

Capacity utilization is expected to increase in the European economy (Euro countries) in 2008. Growth of 2.3% is forecasted for the Euro economy in 2008.

UK Economy in 2008

Growth in the UK economy is also forecasted to slow down in 2008. Currently growing at 2.6%, it is expected to grow at 2.3% in 2008.

Russian Economy in 2008

The Russian economy, growing at 7 % in 2007 is expected to grow at 6.5 % in 2008.