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The world economy

9

Sources

Source: OPEC Secretariat, Consensus, Economist Intelligence Unit (EIU).

Table 2

Summary of macroeconomic performance of the ‘BRIC’ countries in 2016

GDP

growth

rates

Consumer

price

index

Current

account

balance

Governmental

fiscal

balance

Net

public

debt

% y-o-y change

US $ bn

% of GDP

% of GDP

Brazil

–3.6

8.7

–21.8

–6.3

71.5

Russia

–0.5

7.0

22.1

–3.6

10.1

India

7.5

4.9

–8.7

–3.8

51.6

China

6.7

2.1

260.8

–3.8

20.0

quarterly rise in inflation in 4Q16 of 0.3%, also sup-

ported by developments in the oil market.

The Euro-zone continued its recovery in 2016 with

solid growth once again, also lifted by improving periph-

eral economies; hence the recovery was relatively broad

based. While Germany, the Euro-zone’s largest econo-

my, led the momentumwith 1.8%GDP growth, Italy, the

third-largest economy, also contributed positively with

0.9% and Spain experienced a significant rise in growth

of 3.2%, as did Ireland with 3.6%. Themain issues hold-

ing the Euro-zone back from even higher growth rates

included a still-high unemployment rate, which stood at

10% on average, low inflation, which was at 0.2% on

average and a still-weak banking sector. With a more

balanced oil market and ongoing ECB stimulus, inflation

rose to 1.1% in December, leading the economy into a

more balanced situation.

Emerging and developing economies

Brazil’s GDP contracted by 2.5% year-on-year (y-o-y)

in 4Q16, marking the eleventh consecutive quarter of

deceleration in the country’s longest and deepest re-

cession ever. This brought the overall contraction for

2016 to 3.6% y-o-y. The deceleration in GDP seemed

to have bottomed out in 4Q15 when the economy

contracted by 5.8%. The pace of contraction gradu-

ally eased to 5.4%, 3.6%, 2.9% and 2.5% in 1Q16,

2Q16, 3Q16 and 4Q16, respectively. Inflation growth

slowed from 11.3% y-o-y in January 2016 to 6.6% in

December 2016. After experiencing deep recession

for more than two years, which brought the GDP down

to less than that in 2Q12, the economy finally ap-

peared to be sending signs of a gradual reversal. One

area in which Brazil saw substantial improvement is

slowing inflation, which helped consumer sentiment

and allowed the central bank to lower its benchmark

interest rate by 50 basis points in 2016. Although re-

maining in recession, both the services and manufac-

turing sectors seemed to be turning a corner.

The economy of Russia is estimated to have con-

tracted by 0.5% y-o-y in 2016. Official data showed

contraction of 1.2%, 0.6% and 0.4% y-o-y in the

first three quarters of 2016. GDP contracted in 3Q16

by 0.4% y-o-y, the slowest pace since the onset of