A rise in older-age workers, as well as those from accession countries, had expanded the labour market it and the ‘think tank’ envisages 2.75% to 3% growth in GDP through to 2008 - against the Treasury forecast of 2.5%. The figures put the gap between potential and actual growth at around 1% of GDP.

Questions

What is meant by the term ‘economic growth’?
Why is the gap between potential and actual growth now so closely monitored by economists?
If these trends in growth prove to be accurate what would you forecast happening to (a) inflation and (b) unemployment in the UK?
What other affects do you think the rise in both older workers and economic immigrants will have on the UK economy?

The EU News

Europe's economy is growing faster than the US or Japan, according to the latest figures for the second quarter of this year.

Growth across the 25 members of the European Union was 0.9% in the quarter, up from 0.8% in the first quarter and representing 2.8% over the year.

Comparable growth figures for the US and Japan were 0.7% and 0.2%.

The economies of the 12-nation euro currency group also grew at 0.9% over this period.

However, it is not all good news for Europe is lagging behind its economic rivals when it comes to creating new jobs.

During the second quarter unemployment across the EU was unchanged at 8%, some distance behind the US with 4.8% unemployment or Japan at 4.1%.

Poland has the highest jobless rate in the EU, with a 15% jobless toll. Slovakia is second in the unemployment league, with 14% out of work.

Economists expect the rate of growth to cool towards the autumn, with the European Central Bank signalling the likelihood of further interest rate rises in order to curb inflation.

Questions

Why might growth rates ‘cool’ in the Autumn?
Which countries belong to the Euro Zone?
What is the role of The European Central Bank in controlling inflation within the Euro Zone?
What are the main reasons why economists think the EU average unemployment rates lags behind that of the US and Japan?

International News

With the annual meeting of the IMF now eminent it is a good time to take a look at some the statistics that show the plight of the poorest countries in the world.

First, just who and where are the most indebted countries in the world? Hopefully, you can name those that appear in the map below.

Next, who contributes to the aid sums that are available to the poorest nations?

Then we need to address the issue who gets what?

Finally, who on the continent of Africa (the poorest of all the continents) receives what sums of aid?

Questions

What are the main types of aid?
Why did some countries become so heavily indebted
In what other ways might the developed countries help the economies of the poorest countries?

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