Global gross domestic product growth is recovering, but could slip a little this year before returning to a higher growth rate.
That's the expectation of Chemical Market Associates Inc.'s chief economist, Tim Hopper.
We're back on track globally, said Hopper, who joined CMAI last year. The economy on the whole is in expansion mode.
But in the short-term, world GDP growth should slow to 3.6 percent in 2011 after checking in at 3.9 percent for 2010. The rate then should climb to 4 percent in 2012, before averaging between 3.8 and 4.2 percent from 2013-16.
That pattern is partly the result of a 2010 year when faster-growing economies such as China had to tap on the brakes to slow growth, while developing economies in the United States and Europe needed even more financial stimulus, Hopper said March 23 at CMAI's World Petrochemical Conference in Houston.
Global GDP is now expanding, but it lost 2 percent in the recession [of 2008-09], he said. Some people feel the recovery is still fragile and could go into new recession. The gap between past and present performance is still wide.
Growing economies are expected to play a large role in the years ahead. China, the Middle East and Asia are expected to account for almost 60 percent of future growth. Government debt is the big reason for slower growth in developed economies like the U.S., Canada, the eurozone and Japan, according to Hopper.
And although 2011 should see more growth potential in the industrialized world, including renewed investment in capital equipment, it's expected to take several more years for U.S. manufacturing to reach pre-recession levels, he said.
Hopper also addressed a pair of very recent events in the Middle East turmoil and Japan's tsunami and earthquake. In one scenario, if oil prices climb by 40 percent because of Middle Eastern political strife and stay there for a lengthy period of time global GDP growth could shrink to less than 3 percent.
In Japan, which accounts for 7 percent of global GDP, the recent disasters have had a terrible human toll, but they aren't expected to have a long-term impact on the nation's economy. After a second-quarter contraction, Hopper said Japan is expected to have four to six consecutive quarters of economic growth.