As the Greek crisis approaches conclusion, the overall economic health of the EU comes into question.
While there has been recovery (the Eurozone is growing at an annual rate of 1.3 percent), it has been sporadic.
In the second quarter of the year France and Italy, which account for 40 percent of the Eurozone economy, slumped. Italy, which had only recently emerged from recession, fell back, managing growth of just 0.2 percent.
Unemployment numbers are also troubling:
Unemployment (June 2015)
- EU 9.6 percent
- Eurozone 11.1 percent
- Greece 25.6 percent (April)
- Spain 22.5 percent
- Italy 12.7 percent
- France 10.2 percent
- Germany 4.7 percent
Other challenges remain. Germany is doing well but its exports will be impacted by a slowdown in Asia, many new jobs are temporary, unemployment figures remain high, and future energy prices are uncertain.
What Does This Mean for Florida?
Europe has traditionally been an important source of foreign direct investment to the state. An uncertain economic future for Europe could lead to more European companies considering expansion or relocation to stronger and more stable economic environments such as Florida. Further slowdown in Asian economies could also lead to an interest in diversification and the pursuit of other markets which Florida could serve as a point of entry to.
Positioning Florida as a strategic and important destination for foreign direct investment (FDI) is a key strategy. This is a strategy identified in the Florida Chamber Foundation’s most recent Trade and Logistics study. To learn more about how the Florida Chamber is work to build Florida’s international relationships, contact Alice Ancona today at email@example.com.
India and the Asia-Pacific Economic Cooperation
Asia Society Policy Institute (ASPI) launched an initiative, ‘India and APEC: Charting a Path to Membership,’ to develop the case and a strategy for gaining India’s membership in Asia-Pacific Economic Cooperation (APEC). The ASPI initiative will be supported in India by leading business association Confederation of Indian Industry (CII).
Joining APEC would be a game-changer for India and would position it for integration into global supply chains as well as serve as a bridge to one day joining the TPP.
India is Asia’s third largest economy and its participation in APEC would be a win for India and the region, particularly at a time when China’s economy is slowing down. India’s entry will require it to update its policy and regulatory environment preparing it for greater market access and trade liberalization in order to fully participate in the global market place.
APEC had a moratorium on new membership for a decade, which has now been lifted.
APEC’s members include the U.S., Russia, China, Australia and Japan. It represents 2.8 billion people and accounts for 57 percent of the world’s gross domestic product and 47 percent of global trade.
What Does This Mean for Florida?
While India is not one of Florida’s top trading partners, its potential is tremendous. Its large economy still remains a “sleeping giant” as it has not fully integrated into the global market place and still lacks critical infrastructure investments to maximize capacity and stimulate business growth. India’s integration into APEC could open doors for greater market access to U.S./Florida exporters and businesses looking to tap into its potential. Relationship building is important for Florida to be at the forefront of an emerging powerhouse that is India poised to become.
In order to remain globally competitive, Florida needs to diversity our trading partners and markets to expand and grow Florida trade. This is a strategy identified in the Florida Chamber Foundation’s most recent Trade and Logistics study. To learn more about how the Florida Chamber is work to build Florida’s international relationships, contact Alice Ancona today at firstname.lastname@example.org.
China’s Troubles Are the World’s Troubles
China’s troubles are the world’s troubles. Its bandwidth cannot be underscored – in 2014 it accounted for 38 percent of global growth. Its reach goes even further as China has invested in many emerging markets and fragile economies around the world that have become dependent on it for growth. Downturn in China will have far reaching implications. There are growing concerns that China could very well trigger the next global recession.
China’s economy is facing a variety of challenges:
- By providing short term solutions to stabilize its economy it’s also putting pressure on and increasing its debt bubble
- Diminishing returns on its stimulus efforts
- Bailouts and plunging shares in the stock market- efforts to ease the fallout from many years of borrowing are all taking its toll
- Putting a floor on plummeting shares is essentially another bailout on top of a previous one
A significant indicator of the widespread effect of China’s financial situation is the impact China’s slowdown is having on Singapore, an open and trade dependent economy. Singapore experienced a GDP drop of 4.6 percent last quarter, a decrease most likely linked to China. Singapore also experienced a 14 percent decrease in manufacturing from the previous three months; non-oil exports to China fell 4.3 percent in May, 5.1 percent in April and plunged 22.7 percent in February.
China’s impact on Singapore are certainly concerning as are the impacts on its other neighbors in the region which are reliant on a strong Chinese growth engine. Several countries in Asia have experienced economic slowdowns and decreased exports which have exposed them to risk thus making them vulnerable. With more than 40 percent of global growth coming from Asia (according to Deutsche Bank AG), further slowdowns in China’s economy would certainly have implications on global economic growth.
India: World’s Fastest Growing Economy
India will be the world’s fastest growing economy, for the second consecutive year in 2016 at 7.5 per cent according to the World Economic Outlook Update recently released by the International Monetary Fund.
India’s growth projection for current year is at 7.5 per cent, which will be higher than China’s 6.8 per cent. China was the fastest growing economy in 2014, at 7.4 per cent as against India’s 7.3 per cent, as per the IMF data.
India, in the coming years, has plans to expand its manufacturing base, simplify India’s regulatory bureaucracy, and improve its tax structure and to modernize its infrastructure and military and is looking to the U.S. for involvement and investment.
Trade between India and the U.S. and Florida for that matter is a shadow of what it could be. There are opportunities in India for Florida. Forecasters predict consumer spending in India will exceed $4.3 trillion in 2023, nearly quadruple the level last year. The U.S. is now India’s second-largest supplier of military hardware, accounting for 7 percent of its military imports between 2009 and 2013.