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ANNUAL REVIEW 2013 — ENHANCING GLOBAL COMPETITIVENESS — MARKETS & PERSPECTIVES
As the global economy continues its slow recovery, air trafc
is expanding, driven in particular by emerging markets.
Due to budget constraints, government spending in Europe and the US
is expected to remain at at best in the near to mid-term.
MARKETS
& PERSPECTIVES
Solid momentum in air trafc
SLOW GLOBAL ECONOMIC RECOVERY
In its October 2013 World Economic Outlook, the International
Monetary Fund (IMF) reported weak global growth in 2013,
at a projected 2.9% for the full year (2012: 3.2%).
Advanced economies averaged 1.2% growth in 2013 (1.5% in
2012) with the US expanding at 1.6% (2012: 2.8%) and the Euro
area shrinking by 0.4% (2012: -0.6%).
Emerging market and developing economies slowed to an
average 4.5% growth in 2013, down from 4.9% in 2012. Growth
in China in 2013 was estimated at 7.6% (2012: 7.7%), with India
projected to grow 3.8% (2012: 3.2%) and the ASEAN-5 countries
(Indonesia, Malaysia, Philippines, Thailand and Vietnam) to grow
5.0% (2012: 6.2%).
The IMF reported somewhat better near-term prospects, with
global Gross Domestic Product (GDP) growth forecast at 3.6% in
2014. The United States economy is expected to grow 2.6% in
2014, with the Euro area returning to moderate growth of 1.0%.
Emerging market and developing economies are forecast to
grow at 5.1% in 2014, with a growth rate of 7.3% in China, 5.1% in
India and 5.4% across ASEAN-5 countries. In its report, the IMF
warns of risks faced by emerging markets relating to exchange
rates and nancial markets.
LONG-TERM ECONOMIC TRENDS
According to the PwC “World in 2050” report published in 2013,
the global economy is expected to grow at an average rate of just
above 3% per year up to 2050, doubling in size by 2032 and
nearly doubling again by 2050.
The report predicts that emerging economies will continue to
grow at a faster pace than advanced economies, as a catch
up process continues. According to PwC, China is projected
to overtake the US as the largest economy by 2017 in
purchasing power parity terms and by 2027 in market
exchange rate terms.
Singapore Airlines A380
AIR TRAFFIC CONTINUES CURRENT GROWTH PATH
Air trafc growth tends to be positively correlated to GDP growth.
In its March 2014 nancial update, the International Air Transport
Association (IATA) reported that global air trafc, measured in
revenue passenger kilometres (RPK), rose 5.2% in 2013,
following a 5.3% year-on-year increase in 2012.
Air trafc increased 2.2% in North America (2012: 1.0%) and 4.0%
in Europe (2012: 4.5%). Estimated air trafc growth was
signicantly higher in Asia-Pacic at 7.2% (2012: 6.1%) and the
Middle-East at 11.9% (2012: 14.7%).
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