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The Economy & You #46: Outlooks of the World Economy – Perceptions & Reality

In my previous article, I wrote about the Global Attitudes Project conducted by the Pew Research Center regarding public opinion about the world economy.  Pew Research reported that a majority of people in 21 countries surveyed had a negative outlook of their nation’s economy.  Does the public’s perception of their national economy coincide with what is actually happening?

From the data that the Pew Center collected, a strong correlation exists between public perception and recent economic experience.  In China, 70% say they are better off than they were five years ago and the data would affirm those beliefs as China has experienced an average economic growth of 10.5% each year from 2007 to 2011. People in India and Brazil have also indicated a positive outlook.  50% of Indians say they are better off and India has averaged annual growth of 8.1%. Similarly, 72% of Brazilians have said things have improved economically and growth has averaged 4.2% over the last five years.

An interesting result from the public opinion surveys that came forward was that people feel much better about their own personal economic situation than they do about the national economy. In 19 of the 21 countries surveyed, the people surveyed had a more positive outlook on their personal situation than that of their country and in 16 countries the difference was significant (10 percentage points or more).  This was especially true in Spain where only 6% of the people surveyed felt good about the national economic situation but 57% felt good about their personal economic situation, a stunning difference of 51 percentage points.

A college education had a role in peoples’ perceptions as well. In 15 nations, those people surveyed who had college degrees were more satisfied with their personal economic situation than those who did not have a college degree.  This is another indication that it pays to have a college degree.

A clear result that came forward in the report is that emerging economies like Brazil, China, India, and Turkey are upbeat about the present and the future. People in these nations have a positive outlook regarding their national economy, their personal economic situation, and if they are better off than they were five years ago.

As one would think, people in emerging economies that are experiencing strong growth are more likely to be optimistic about their economic situation.  Still, there is uncertainty regarding the future in these nations as people believe they will not have an easy time exceeding the well-being of their parents.

The world view of the economy continues to pessimistic as countries continue to experience financial troubles. And while people have a more positive outlook on the3ir own personal economic situation, they are less optimistic when asked to assess their future and whether things will be better for them and their children.  I believe these numbers will improve as the various nations begin to slowly climb out of the financial recession and begin to experience increasing economic growth rates.  The data appears to support this view as emerging economies have positive outlooks which coincide with strong economic growth. We will have to analyze the numbers when the next survey is completed to determine if this theory is correct.


One response

  1. Pingback: Economics 101–I was Wrong and Here is Why « Jeff Oakes

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