Global Economic Outlook 20092nd Quarter 2009 |
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Since our last Outlook in January, the financial crisis has deepened and become a truly global recession. Economic activity in the United States, Europe, and Japan has declined at an alarming rate.
Emerging countries in East Asia and Central Europe have experienced sharp drops in economic activity with the latter at risk of further financial turmoil. Even the BRIC economies that at one time seemed relatively immune to the global financial situation, have experienced serious problems. Global trade has plummeted, causing concern that the increasingly global nature of the economy leads to more rapid transmission of trouble than in the past.
And yet, there are starting to be indications of light at the end of the tunnel. Global shipping rates have stabilized and modestly increased. Risk spreads are far below their level of a few months ago.
And governments have been pumping money into the system at an unprecedented rate.
Still, risks remain. Deflation appears to be rearing its ugly head. The degree to which government action regarding banks will be effective is far from certain. And the specter of protectionism is not far below the surface.
Full study below.
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Global Economic Outlook
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