World Economy Growing Despite Eurozone Turmoil: Analysts

The world economy is moving in the right direction, despite the continuing turmoil in the eurozone economies, according to economists surveyed by Thomson Reuters.

Though the economic performance of Europe continues to weigh on the prospects of global growth, emerging markets and the United States are giving a glimmer hope to the world economy, analysts believe.

The change has already seen in the world economy with the United States growing around 2.2 per cent in the last quarter compared to the zero growth in the eurozone.

Most economists believe that the eurozone's sovereign debt crisis will not boil over into a new global economic crisis, having already dented growth in major exporters to Europe.

"It's important to stress the world economy is still growing. But it's a tale of two worlds," Gerard Lyons, Chief Economist at Standard Chartered Bank opined in a latest report.

"The storyline for 2012 is that Europe drags the world down in the first half of the year, and China drags it up in the second half of the year," believes Lyons.

Growth in the major emerging market economies such as Brazil and China has slowed down recently because of inflationary pressures of the domestic economy. However they are expected to speed up their growth in the second half of the year.

Even the Japanese economy is expected to expand at the rate of 1.8 per cent from the fiscal year beginning April. But the chances of Japan coming out of deflation in the near term are considered very less.

In the Gulf region, oil exporting countries are expected to face slow economic growth due to the eurozone debt crisis and slowing Chinese economy. However most economists believe that the governments would be able to counter the slowdown with spending.

Brazil's economy is expected to grow at a rate of 3.5 percent, which is still a fair improvement from many of the developed economies, though it is far from the country's previous average near double digit rates.

Euro zone as a whole would be in a moderate recession currently which would be expected to last till mid-2012.

According to Juan Perez-Campanero, Economist at Santander the euro area continues to be a source of economic and financial instability for the rest of the world.

"We could be facing a more permanent and lasting decline in growth capacity in developed economies and, particularly, the euro area," commented Juan Perez-Campanero in a report.

Though the European economy is heading for another year of dismal growth, several other factors also add to the worries of the world economy.

Among the negative trends which are casting shadow on the global growth are the ongoing political turmoil in the Middle East and the leadership changes in many powerful countries.

Stock markets around the world were on a heavy loss throughout 2011 and were not able to recover substantially in 2012. Assets managers are still clueless about where to make their investments.

However the economists are seeing a glimmer hope for a global growth by middle of 2012.