"The United States is struggling to hit 2.7% growth for the year, while emerging economies, which also include smaller countries mostly in Asia and Latin America, are collectively on track for 7.1% growth for the year."
This has led to unease weather or not the United States will retain the number one ranking as economic superpower.
"China has already surpassed Japan to become the world's second largest economy, and could overtake the United States for the no. 1 position in 10 to 15 years. If that happens, it will mark the first change in the leadership position, since the U.S. overtook Great Britain in 1894."
However, the growth is not without draw backs.
"And growing too fast can pose other dangers too. For example, China's overheating real estate market is a looming danger, as breakneck growth-- on track for 10.5% in 2010 -- has pushed property prices sky high. A bursting real estate bubble in China could bring on another economic meltdown that could spread to the rest of the world."
Looks like China et. al have to be very careful of managing their growth rates.
The high economics growth is because of the high saving rate-the fraction of output devoted to saving and investment. More capital is added by investment than is removed by depreciation.
ReplyDeleteI think one reason for the BRIC nation's economic growth compared to other Mature Market economies during recession period could be related to their currency appreciations.
ReplyDeleteBrazil's currency, Real, rose a massive 30 percent against the dollar, while the Indian currency, Rupee, rose by 9 percent in the last few months.