The number of long-term unemployed was basically unchanged. The Labor Department weighed in with a report on Friday, revealing that the economy added only 208,000 more jobs in July, down from the June performance. Markets also worry that if the economy grows too fast, the Federal Reserve might pull back from its policy of low interest rates. What gives? Financial markets like it when the economy grows fast enough to signal that the recovery is continuing-but not so fast that labor markets might tighten and workers get more bargaining power to get raises. The Dow lost more than 317 points Thursday and another 70 points Friday. The economy grew at an impressive rate of four percent in the second quarter of this year, according to a government report released on Wednesday. However, in my opinion political and policy stability is the key for success and economic health of the country.This article originally appeared at The Huffington Post. It’s indeed an appropriate time for a country like Sri Lanka to put the foot on the peddle to drive on investment promotion and export promotion as the markets and investors will be more receptive to emerging economies. In a Goldilocks economic situation, its known that intervention by the central banks are less as conditions are observed as stable, however it is important to note that all nations including Sri Lanka must be very careful in managing macroeconomic fundamentals including debt management as some serious challenges such as protectionism and inequality of wealth distribution can derail the recovery and the stability of nations. The crude oil industry and commodity markets are showing signs of better conditions, it is expected that by end of 2018 the crude oil will be between US$65-75 a barrel which most analysts believe will remain at those levels for some time which will help the global trade growth. The positive nature of the US economy, stable growth in China and strong growth in India and the Africa’s, along with stabilizing EU, the overall performance of the global growth recovery story seems to be a moving towardspositive territories.
Global growth forecasts for 20 have been revised upward by 0.2 percentage point to 3.9 percent. The pickup in growth has been broad based, with notable upside surprises in Europe and Asia. Global output is estimated to have grown by 3.7 percent in 2017, which is 0.1 percentage point faster than projected in the fall. The IMF in a January 2018 report says, global economic activity continues to firm up. However, first half of 2017 showed the pattern changing after nearly a decade and now things are turning around as 2017 end showed a strong recovery and the 2018 forecastare atvery positive levels with world trade growing well over 3.2 percent. This unpredictability has proven problematic for businesses operating in all sectors and expected continuous low growth for the foreseeable future. World Trade Organization (WTO) data for 2016 showed a weak trade growth rate of just 1.3 percent for the year, with economic activity slowing down across the board as major economies continue to adjust and reposition themselves. The outcome of the global crisis was shipping becoming a clear oligopolistic industry, which may have positive as well as negative impacts in the coming years for global traders. One of the major sectors that suffered during this crisis was the global shipping industry, which had to bear the brunt of trade imbalance and capacity management. Since this economic crisis of 2008, businesses dependent on international trade have been doing their best to cope with challenging market conditions, as global recovery from the recession continues to prove frustratingly sluggish. The crisis had contributed to the erosion of close to US$10 trillion in market capitalization from global equity markets in October 2008. investment bank at the time of its collapse, with 25,000 employees worldwide. With US$639 billion in assets and US$619 billion in debt, Lehman’s bankruptcy filing was the largest in history, as its assets far surpassed those of previous bankrupt giants such as WorldCom and Enron. Nearly ten years ago creating a global shock waveon September 15, 2008, Lehman Brothers filed for bankruptcy. economy of the mid- to late-1990s was considered a Goldilocks economy because it was “not too hot, not too cold, but just right’. The name comes from the children’s story Goldilocks & the Three Bears. A Goldilocks economy is an economy that is not too hot or cold, in other words sustains moderate economic growth, and that has low inflation, which allows a market-friendly monetary policy.
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