Globalization continues despite obscure economic perspectives – E&Y

Photo: globalsherpa.org

Despite the uncertainty of economic forecasts concerning the situation around the global economy, in the majority of 60 leading counties which until now have chosen not to get into protectionism there are still strong ongoing globalization processes. However, 90% of companies managers expect more protectionism if the global economy is washed by the “second wave” of crisis. That’s what Ernst & Young analysts say in their recent report

This one is the third of Ernst & Young’s annual research papers dedicated to globalization. It is based on two of its original ones – the “Globalization Index” (aimed to determine the rating of 60 largest economies by the degree of their globalization as % of GDP) and the second one - to predict growth rates of global and national GDP for the next 4 years.

In 2012 E&Y expects global GDP growth rate at 3%. At the same time, “Globalization Index” predicts further globalization processes – this year, in 2013, and so on until 2015. This first of all deals with emerging middle-sized economies like Vietnam, Malaysia, Mexico, and Columbia, but also a bunch of European counties like Belgium, Denmark, Slovakia, and Austria. The only two large economies for which they expect slight decrease of globalization in the nearest three years are the USA and Great Britain. This is related to new migration rules being adopted in both countries, which will affect foreign labor force.

For the last two decades globalization stopped only once – in 2009, when the financial crisis peaked. Meanwhile, participants of the survey think that worsening of economic conditions will lead to intensification of protectionism. The threat is recognized by E&Y’s Global Chairman and CEO Jim Turley who says that business and governments will have to stand further for globalization as the positive force behind creation of economic and social wealth, and trying not to slip into protectionism.

Source: Ernst & Young