The current global economy has become a level playing field for all countries on account of the domino effect of “globalization.” Healthy interaction between the developed and the developing countries in the field of trade and the exchange of technological know - how has helped the global economy prosper remarkably. There has been a significant growth of real Gross Domestic Product (GDP) in most countries of the world and a consequent rise in the global income levels.
Current Global economy refers to the current trends of the global economy over a period of time. Globalization has made it possible for domestic producers to expand and emerge on the international scene. Therefore it has been possible for consumers to choose from a wide range of local and imported commodities .
The following are some of the important features observed from studies on the current global economy :
The current global economy is in a relatively stable stage with the economies of US and Japan showing an upward growth trend in recent years. USA had experienced a healthy growth rate of 3.5% for the year 2005 and 5% for the first quarter of 2006. However, this rate of growth could not be sustained due to the continued rise in global oil prices and the widespread devastation caused by hurricane Katrina. Adoption of sound monetary and fiscal policies by the US Government has once again brought back stability to the growth rate. In Japan, the economy has got a major boost with phenomenal growth rates experienced by its long trading partner, China. Europe as a whole, had also grown marginally over the past few years with some countries of the European Union recording unprecented rates of growth. Major free trade agreements like the NAFTA (North American Free Trade Agreement) and SAFTA (South Asian Free Trade Agreement) have been signed in the current years as a means to boost international trade, worldwide.
The “dollarization” of world currencies,...