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For nearly two years the Japanese economy has grown significantly faster than commentators expected, raising the question of whether the country has finally broken out of its long economic malaise. This article by Simon Knapp examines recent developments to see whether this recovery is sustainable. It argues that over the last year the recovery has broadened out beyond merely the export sector, although there are good reasons to believe that growth as measured by GOP has been overstated and that many serious structural problems remain. Business investment has surged on the back of rising profitability and an improved labour market has helped lift consumer confidence. At the same time the paper recognises the importance of China's boom in stimulating the Japanese economy over the last two years, and estimates that this factor may have boosted the level of GDP by between 1 to 2%. With Chinese growth now moderating to more sustainable levels, export growth will slow over the next year or so. However, domestic demand should now be strong enough, in the absence of major external shocks, to generate GDP growth of around 1.5 to 2% per annum in the medium term; a respectable figure given the country's falling population. [ABSTRACT FROM AUTHOR]

▀ World trade has picked up in recent months, expanding at the fastest pace in six years in the first quarter, with the rise fairly evenly split between advanced and emerging markets. Stronger activity in China and a broader upturn in global investment have been key factors. But there are still reasons for caution. Although the 'cyclical' element in world trade is improving, the 'trend' element is not thanks to changes in supply chains and a lack of trade liberalisation., ▀ World trade growth looks set to reach about a 4% annual rate in Q1 2017, the fastest pace since 2011. Alternative freight-based indicators confirm the upturn. This suggests some modest near-term upside risk to our world growth forecasts., ▀ Recent growth has been evenly split between advanced countries and emerging markets (EM). In EM, the end of deep recessions in Russia and Brazil and an upturn in China have been key factors. China directly added 0.5 percentage points to annual world trade growth over recent months and firmer growth there has also pushed up commodity prices and the spending power and imports of commodity exporters., ▀ Another important positive factor is an improvement in investment, which is a trade-intensive element of world GDP. Rising capital goods imports across a range of countries suggest the drag on world trade from weak investment is fading., ▀ The decline in the ratio of world trade growth to world GDP growth over recent years has both cyclical and structural elements. But while the cyclical component now seems to be improving, there is little evidence that the structural part - responsible for between a half and two-thirds of the recent decline - is doing likewise., ▀ Key factors behind the structural decline in world trade growth are changes in supply chains and a lack of trade liberalisation/protectionism. Both are likely to remain a drag over the coming years. Meanwhile, a levelling-off of growth in China and drop back in commodity prices could curb the recent cyclical uptick. [ABSTRACT FROM AUTHOR]

We estimate that the UK has a relatively large output gap of around 2¾% of potential output. With the legacy of the financial crisis fading, the UK should see healthy growth in potential output of around 2.1% a year from 2015-24. Usually this would drive a period of strong economic growth, but we expect GDP growth to average a relatively underwhelming 2.4% a year over this period, largely due to the drag from aggressive fiscal consolidation., There is significant disagreement amongst economists about the size of the output gap. Estimation of the output gap has been problematic since the financial crisis because of the depth of the recession and relatively slow pace of the subsequent recovery, while sizeable revisions to the national accounts data have been an added complication. Our estimate of the output gap is towards the top of the range of independent forecasters surveyed by HM Treasury, but it is consistent with the literature on the impact of financial crises on potential output., We expect potential output growth of 2.1% a year from 2015-24, a faster pace than that seen since the financial crisis, but some way short of the experience of the pre-crisis decade. The shortfall relative to the pre-crisis period is largely due to a smaller contribution from growth in labour supply, which reflects the impact of an ageing population. However, labour is set to make a much stronger contribution to potential output growth in the UK than in most other major European countries over the next decade., The combination of a large output gap and healthy growth in potential output will provide the conditions for firm growth and low inflation over the medium term, with GDP growth expected to average 2.4% a year from 2015 to 2024. Growth could be stronger were it not for the sizeable drag from fiscal consolidation over the next four years and the dampening effect that this will have on activity. This will ensure that the output gap closes very slowly. The government's fiscal plans are heavily influenced by the OBR's view that there is limited scope for stronger growth to drive an improvement in the public finances. But if our view turns out to be correct, it will become apparent that the government has pursued a more austere path than is strictly necessary in order to comply with its fiscal rules. [ABSTRACT FROM AUTHOR]

Overview: Dollar surge brings mixed consequences The strengthening dollar is now becoming a significant factor for global growth and our forecasts. The tradeweighted dollar is up 2.5% over the last month and over 12% on a year ago., Driving the latest rise are growing expectations of US rate hikes while monetary policy in many other major economies is headed in the opposite direction., The beginning of ECB QE has prompted a further slide in bond yields and the euro - which at 1.06/US$ is on course to fulfill our forecast of near-parity by year-end. Weak data in Japan also raises the chance of a further expansion of QE there later this year., We remain relatively positive about the advanced economies: we forecast G7 GDP growth at 2.2% for 2015 and 2.3% next. This month we have revised up German growth for 2015 to 2.4% - a four-year high., Robust US growth and a strong dollar are good news for the advanced economies. US import volume growth firmed to over 5% on the year in January, while the dollar surge potentially boosts the share of other advanced countries in this growing market., But for the emerging economies the picture is mixed. A stronger US may boost exports, but rising US rates are pulling capital away: there has been a slump in portfolio inflows into emergers in recent months. Emerging growth may also suffer from higher costs of dollar funding and a rising burden of dollar debt as currencies soften - the more so if US rates rise faster than markets expect., Moreover, emergers are also under pressure from a slowing China. Chinese import growth has been weak of late and commodity prices remain under downward pressure. A notable casualty has been Brazil, which we have downgraded again this month - GDP is expected to slump 1.1% this year., Emerging GDP growth overall is expected to slip to 3.7% this year, the lowest since 2009. And excluding China, emerging growth will be only 2.2% - the same as the G7 and the worst performance relative to the advanced economies since 1999. [ABSTRACT FROM AUTHOR]

Rapid expansion of the labour supply and robust business investment means that potential output is likely to have grown strongly last year. Therefore, based upon the latest data for GDP, we estimate that the output gap only narrowed very slightly in 2014, ending the year at 4% of potential output., The prospects for potential output growth are favourable, with the labour supply set to be boosted by sustained strength in inward migration and the staged increase in the State Pension Age, and robust growth in business investment continuing to deepen the capital stock., This will provide the conditions for relatively strong growth and low inflation over the medium term, with GDP growth expected to average 2.6% a year from 2015-19. This is some way below the average of the decade prior to the financial crisis, but it would represent a clear step up on the average growth rate achieved between 2007-14., Our estimate of the output gap is much larger than that of the OBR. This suggests that the UK's structural deficit is smaller and that the degree to which fiscal policy needs to be tightened may not be as great as the OBR estimates. [ABSTRACT FROM AUTHOR]

The article presents economic outlook for London, England as of May 2007. Real gross domestic product (GDP) is expected to increase by a further 3.6 percent this year on top of an estimated 4.4 percent in 2006. Increasing global demand for financial services and London's position as the most global of world cities reinforce a forecast of continuing strong economic growth for the city. Tables are presented that show detailed forecasts for employment sector by sector.

The article offers an outlook for the world economy. It is expected that the impact on global growth would be modest, given the limited decline in equity markets. The U.S. housing sector has worsened and set to remain a drag on the overall growth. Based on data on employment and consumption, resilience is seen in the wake of the crisis. The cost of borrowing for firms and consumers have been driven by the repricing of risk and the liquidity squeeze in money markets. Meanwhile, gross domestic product growth in the Eurozone was disappointing at 0.3%.

The article offers an outlook for the world economy. It is expected that the impact on global growth would be modest, given the limited decline in equity markets. The U.S. housing sector has worsened and set to remain a drag on the overall growth. Based on data on employment and consumption, resilience is seen in the wake of the crisis. The cost of borrowing for firms and consumers have been driven by the repricing of risk and the liquidity squeeze in money markets. Meanwhile, gross domestic product growth in the Eurozone was disappointing at 0.3%.