by Vipin Agnihotri
First and foremost, the real GDP of the US, which has been declining over the past few years, is only set to grow by 1.9 per cent this year and growth rate will remain the same for next year too.
On the other hand, Euro Area, which has experienced alternating increase and fall in its growth rate is all set to grow at 2.5 per cent this year and 2.1 per cent the year next. Netherlands and Belgium, whose real GDP growth rates have been pegged at 2.6 per cent this year will respectively grow at 2.5 per cent and 1.9 per cent the next fiscal. Initial signs are that the GDP of France will experience marginal surge in its real GDP and will attain growth rate of 2 per cent in 2008 from its current figure of 1.9 per cent.
Talking about consumer prices for the US, it is growing at 2.7 per cent in the present fiscal and is all set to dip by 2.3 per cent for the next fiscal. On the other hand for Euro Area, Italy and Belgium, the consumer prices enhances, which are respectively 2 per cent, 1.9 per cent and 1.8 per cent for the year 2007.
In my opinion, the prices will increase for France, Spain and Netherlands by 1.8 per cent, 2.8 per cent and 2.2 per cent respectively from the present growth rates of 1.6 per cent, 2.5 per cent and 2 per cent. Indications are that Germany will experience a decline in its consumer prices by 1.8 per cent from its present rise of 2.1 per cent.
The pivotal factor here is that the unemployment in the US and Spain, which is decreasing up to now is set to increase and will attain the figures of 5.5 per cent and 8.2 per cent next year respectively from their present levels of 5.3 per cent and 8.1 per cent. Euro Area, Germany and Netherlands will experience slight decrease in their employment rates.
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