The long-term growth scenario keeps getting weaker and weaker. The Conference Board has released data showing that world economic growth will drop from 3.2% in 2012 to 3.0% in 2013. While mature economies are a drag, emerging markets did not pick up the slack in 2012 and the Conference Board does not expect them to in 2013. Sluggish trade and low foreign direct investment are being hampered by the coming fiscal cliff, reform in Europe, and even the leadership change in China.

On advanced economies, including Europe:

Across the advanced economies, the Outlook predicts 1.3 percent growth in 2013, compared to 1.2 percent in 2012. The slight uptick is largely due to the Euro Area, which is expected to return to very slow growth of 0.2 percent after the -0.6 percent contraction in 2012. U.S. growth is expected to fall from 2.1 percent in 2012 to 1.8 percent in 2013.

On emerging economies:

Overall, growth in developing and emerging economies is projected to drop from 5.5 percent in 2012 to 4.7 percent in 2013; For 2013, the two largest developing economies should fall between these extremes, with growth falling in China from 7.8 to 6.9 percent and in India from 5.5 to 4.7 percent.

None of this is a great prelude to what is coming down the pipe when you consider how indebted the developed nations are. The very long-term growth rates are even lower. That is true for the emerging economies as well.

Here is the full Conference Board report with an outlook from 2013 to 2018, as well as an outlook for 2019 to 2025.

JON C. OGG

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