Former VP of World Bank, Ian Goldin told newspersons early this week that the growth in emerging markets are holding up the global economy while established nations are threatening to break it down. According to him the trade war has had limited effect on economy of US while external factors are influencing it more. Though its economy enjoyed the financial stimulus brought in by President Donald Trump during initial years the actual strength was from overseas export markets. Emerging markets growing by an average rate of 4.5 percent are bearing the burden of world economy and carrying it forward.
Without this pace of growth the growth in US and European markets would have slowed down to a crawl said Mr. Goldin who is now a professor at Oxford. He explained that China and several economies in Asia are leading the growth and China is likely to grow at a robust pace of 6 percent for another decade while others around it may also grow at the same pace. This will lead to a historical rebalancing of growth as center of world economy is moving to Asia which is a good omen. This will help to move global growth to developing countries.
This lateral shift of power will make the global economy stronger than before so that it is no longer affected by ups and downs of US economy. The US is likely to face slowdown as it heads into elections next year and strong moves made by President Trump to retain power. Protectionism policy the country has adopted recently will also lead to problems. Goldin compared the current state of world economy to middle age crisis as power is shifting from old to younger economies. Both UK and USA, will realize the hard way that they no longer run the world which will lead to adjustment problems.