Europe: How strong is the post-recession economy?
The global recession affected countries around the world, and its aftershocks were felt across numerous economies, each of which have dealt with the fallout in their own ways.
Six years on, some nations are experiencing strong growth and are looking forward to a bright future, while others are still struggling to lift themselves out of the doldrums. It is indeed a very mixed picture.
So here we take a look at the economic situation in our biggest region - Europe, to see how things have progressed in the first half of 2014 and what the future holds.
Europe is recovering from a double dip recession and the European Commission seems confident that progress has been made in the first half of the year as conditions for a sustained recovery continue to improve.
The latest available figures from Europe's statistical office Eurostat show that in the first quarter of the year, GDP expanded by 0.2 per cent in the euro area compared to the previous quarter. Slow growth, but growth nonetheless.
However, performances varied widely across nations, with several experiencing zero or even negative growth, suggesting that while some economies are definitely on the road to recovery, others have not yet picked up and may be weighing down the progress of the region as a whole.
There is also an ongoing unemployment crisis in the eurozone, with levels of joblessness remaining somewhat static throughout the first six months. In May, unemployment was 11.6 per cent, and once again, there is a mixed picture. In Germany 5.1 per cent of the population were out of work, while in Greece and Spain the figures stood at 26.8 per cent and 25.1 per cent respectively.
Commentators have already made remarks about Europe's strong reliance on the German economy, which, as the region's largest, is acting as its engine for growth. They are concerned that other nations would be unable to pick up the slack should Germany begin to slump.
Another issue that has been threatening Europe's recovery during the first half of the year is inflation. The annual rate of inflation in the eurozone was 0.5 per cent in June, unchanged on May and down from 0.7 per cent in April.
This is well below the European Central Bank's two per cent target and policymakers expect it to remain low for the foreseeable future. It's why they took the unprecedented step of introducing a negative rate of interest last month in the hope of bringing inflation back up.
As has become apparent during the first half of the year, there are a number of potential disruptions to the economic recovery bubbling under the surface in Europe, not least low inflation.
Some analysts have speculated that the eurozone could find itself sliding into deflation in the second half of the year should there be any unanticipated setbacks. Indeed, some European economies, including Greece and Bulgaria, have already reported negative price growth.
Deflation could easily undermine the European Central Bank's ability to propel the recovery onwards and prevent the economy slipping back into recession.
There are also some concerns over the strength of France as we move into the second quarter of the year, with economists warning that the country's economy is at risk of stagnation and, since it is the second largest economy in Europe, that its performance could hamper the eurozone recovery.
Indeed, figures for May showed there was something of a setback in France, with weaker demand prompting a contraction in activity within the country's manufacturing and services sectors.
"The weakness of France is visible," Bertrand Badre, Chief Financial Officer at the World Bank Group in Washington, told the New York Times. "It's not that France and Germany should dominate, but if we can't find a way together it might be an issue."
His view is shared by others who have warned that France needs to step up its efforts to boost economic growth to bring it in line with its stronger performing neighbour Germany.
Overall the outlook seems somewhat positive for all three regions in which we operate – Australia, SE Asia and Europe. The economic climate is certainly much healthier than it was a few years ago in the wake of the global recession and things do appear to be looking up in many cases.
However, there are concerns over whether recoveries and growth can be sustained and whether certain economic shocks could bring everything tumbling down once again. One thing is for certain, the next six months will be crucial in determining the health of all three economies in future years.
To read our report on Australia’s economic performance click here.
To read our report on SE Asia’s economic performance click here.