Recession of 2009/Addendum: Difference between revisions

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{{subpages}}
==Selected economic statistics==
==Selected economic statistics==


===Growth rates===
===Growth rates===


GDP at constant market prices<br>
:GDP at constant market prices<br>
% change on previous period  
::% change on previous period  


::{|class="wikitable"
::{|class="wikitable"
!
!colspan = "4"|
!colspan = "4"|2007
!colspan = "4"|2008
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2011
|-
!
!
! 2006
! 2006
Line 13: Line 20:
! 2008
! 2008
! 2009
! 2009
!Q1 07
!Q1  
!Q2 07
!Q2  
!Q3 07
!Q3  
!Q4 07
!Q4  
!Q1 08
!Q1  
!Q2 08
!Q2  
!Q3 08
!Q3  
!Q4 08
!Q4  
!Q1 09
!Q1  
!Q2 09
!Q2  
!Q3 09
!Q3  
!Q4 09
!Q4  
!Q1
!Q2
!Q3
!Q4
!Q1
!Q2
!Q3
!Q4 
|-
|-
|United States
|United States
| 2.8
| 2.8
| 2.0
| 2.0
| 1.1
| 0.4
|
| -2.4
| 0.0
| 0.0
| 1.2
| 1.2
Line 39: Line 54:
| -0.1
| -0.1
| -1.4
| -1.4
| -1.6
| -1.2
| -0.3
| -0.2
| 0.4
| 1.2
| 0.9
| 0.9
| 0.9
| 1.4
| 0.6
|
| 0.6
| 0.1
| 0.3
| 0.5
| 0.7
|-
|-
|Japan
|Japan
Line 49: Line 71:
| 2.4
| 2.4
| -0.6
| -0.6
|
| -5.3
| 1.0
| 1.0
| -0.3
| -0.3
Line 58: Line 80:
| -0.4
| -0.4
| -3.2
| -3.2
| -3.3
| -4.2
| 0.6
|  1.7
| 1.2
|  0.1
|
| 1.1
| 1.2
| 1.3
| 0.6
| -0.6
| -1.8
| -0.3
| 1.7
| -0.2
|-
|-
|Canada
|Canada
Line 67: Line 97:
| 2.7
| 2.7
| 0.5
| 0.5
|
| -2.6
| 1.0
| 1.0
| 1.0
| 1.0
Line 79: Line 109:
| -0.6
| -0.6
| 0.1
| 0.1
|
| 1.2
| 1.5
| 0.6
| 0.6
| 0.8
| 0.9
| -0.2
| 1.0
| 0.4
|-
|-
|United Kingdom
|United Kingdom
Line 85: Line 123:
| 3.0
| 3.0
| 0.7
| 0.7
|
| -4.8
| 0.8
| 0.8
| 0.8
| 0.8
Line 94: Line 132:
| -0.7
| -0.7
| -1.6
| -1.6
| -2.4
| -2.3
| -0.6
| -0.7
| -0.2
| -0.3
|  0.1
|  0.4
|  0.4
|  1.1
|  0.7
| -0.5
|  0.2
| -0.1 
|  0.6
| -0.3
|-
|-
|Germany
|Germany
Line 103: Line 149:
| 2.5
| 2.5
| 1.3
| 1.3
|
| -5.0
| 0.4
| 0.4
| 0.4
| 0.4
Line 112: Line 158:
| -0.5
| -0.5
| -2.1
| -2.1
| -3.8
| -3.4
|  0.5
|  0.7
|  0.3
|  0.3
|  0.7
|  0.6
|  0.0
|  1.9
|
|  0.8
|  0.5
| 1.3
| 0.3
| 0.6
| -0.2
|-
|-
|France
|France
Line 122: Line 175:
| 2.2
| 2.2
| 0.8
| 0.8
|
| -2.3
| 0.6
| 0.6
| 0.5
| 0.5
Line 131: Line 184:
| 0.1
| 0.1
| -1.1
| -1.1
| -1.2
| -1.5
|  0.3
|  0.1
|  0.3
|  0.3
|  0.6
|  0.6
|
| 0.2
|  0.7
|  0.4
|  0.4
| 0.9
| 0.0
| 0.3
| 0.2
|-
|-
|Italy
|Italy
Line 141: Line 201:
| 1.6
| 1.6
| -1.0
| -1.0
|
| -5.0
| 0.2
| 0.2
| 0.1
| 0.1
Line 150: Line 210:
| -0.7
| -0.7
| -2.1
| -2.1
| -2.4
| -2.9
| -0.5
| -0.3
| 0.8
| 0.4
| -0.1
|  0.4
|  0.5
| 0.2
|  0.2
|  0.1
|  0.3
| -0.2
| -0.2
| -0.7
|}
|}
::(Source: OECD, Main Economic Indicators)


Source: OECD, Main Economic Indicators
===Consumer prices===
: percentage increase on the same period of the previous year
 
:::::::{|class = "wikitable"


! colspan = "3"|
! colspan = "4"| 2009
|-
!
! 2008
! 2009
! &nbsp;Mar&nbsp;
! &nbsp;Jun&nbsp;
! &nbsp;Sep&nbsp;
! &nbsp;Dec&nbsp;
|-
! United States
| align = "center"| 3.8
| align = "center"|-0.4
| align = "center"|-0.4
| align = "center"|-1.4
| align = "center"|-1.3
| align = "center"|2.7
|-
! United Kingdom
| align = "center"| 3.6
| align = "center"| 2.2
| align = "center"| 2.9
| align = "center"| 1.8
| align = "center"| 1.1
| align = "center"| 2.8
|-
! France
| align = "center"| 2.8
| align = "center"| 0.1
| align = "center"| 0.3
| align = "center"| -0.5
| align = "center"| -0.4
| align = "center"| 0.9
|-
! Germany
| align = "center"| 2.6
| align = "center"| 0.4
| align = "center"| 0.5
| align = "center"| 0.1
| align = "center"| -0.3
| align = "center"| 0.9
|-
! Italy
| align = "center"| 3.3
| align = "center"| 0.8
| align = "center"| 1.2
| align = "center"| 0.5
| align = "center"| 0.2
| align = "center"| 1.3
|-
! Japan
| align = "center"| 1.4
| align = "center"| -1.4
| align = "center"| -0.3
| align = "center"| -1.8
| align = "center"| -2.2
| align = "center"| -1.3
|-
! G7 countries
| align = "center"| 3.2
| align = "center"| -0.1
| align = "center"| -0.1
| align = "center"| -0.9
| align = "center"| -1.0
| align = "center"|  1.8
|}
: (Source OECD[http://www.oecd.org/document/57/0,3343,en_2649_33715_44523833_1_1_1_1,00.html] )
<small>
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
</small>
===Unemployment rates===
===Unemployment rates===
:(ILO definition, seasonally adjusted)
: OECD harmonised rates
:: %  seasonally adjusted)


:::::::{|class = "wikitable"
:::::::{|class = "wikitable"
!
!colspan = "3"|
!colspan = "4"|2009
|-
!align="center"|
!align="center"|
!align="center"| 2007 IV
!align="center"| 2007  
!align="center"| 2008 I
!align="center"| 2008  
!align="center"| 2008 II
!align="center"| 2009
!align="center"| 2008 III
!align="center"| &nbsp; Q1&nbsp;
!align="center"| 2008 IV
!align="center"| &nbsp; Q2&nbsp;
!align="center"| 2009 I
!align="center"| &nbsp; Q3&nbsp;
!align="center"| 2009 II
!align="center"| &nbsp; Q4&nbsp;
|-
|-
|align="center"| United States
|align="center"| United States
|align="center"| 4.8
|align="center"| 4.6
|align="center"| 4.9
|align="center"| 5.8
|align="center"| 5.4
|align="center"| 9.3
|align="center"| 6.0
|align="center"| 6.9
|align="center"| 8.1
|align="center"| 8.2
|align="center"| 8.2
|align="center"| 9.3
|align="center"| 9.7
|align="center"| 10.0
|-
|-
|align="center"| United Kingdom
|align="center"| United Kingdom
|align="center"| 5.1
|align="center"| 5.3
|align="center"| 5.1
|align="center"| 5.5
|align="center"| 5.4
|align="center"| 7.6
|align="center"| 5.8
|align="center"| 6.3
|align="center"| 7.1
|align="center"| 7.1
|align="center"| 7.7*
|align="center"| 7.7
|align="center"| 7.8
|align="center"| 7.7
|-
|-
|align="center"|Japan
|align="center"|Japan
|align="center"| 3.8
|align="center"| 3.9
|align="center"| 3.9
|align="center"| 4.0
|align="center"| 4.0
|align="center"| 4.1
|align="center"| 5.1
|align="center"| 4.0
|align="center"| 4.5
|align="center"| 4.5
|align="center"| 5.1
|align="center"| 5.1
|align="center"| 5.2
|align="center"| 5.2
|-
|-
|align="center"|Germany
|align="center"|Germany
|align="center"| 8.0
|align="center"| 8.4
|align="center"| 7.3
|align="center"| 7.5
|align="center"| 7.3
|align="center"| 7.6
|align="center"| 7.6
|align="center"| 7.4
|align="center"| 7.2
|align="center"| 7.1
|align="center"| 7.7
|align="center"| 7.6
|align="center"| 7.6
|align="center"| 7.5
|-
|-
|align="center"|France
|align="center"|France
|align="center"| 7.8
|align="center"| 7.6
|align="center"| 7.7
|align="center"| 7.8
|align="center"| 8.3
|align="center"| 8.3
|align="center"| 8.8
|align="center"| 7.9
|align="center"| 9.4
|align="center"| 9.4
|align="center"| 8.9
|align="center"| 9.3
|align="center"| 9.5
|align="center"| 10.0
|}
:: (Source: OECD)[http://www.oecd.org/dataoecd/20/21/44746304.pdf]
<small>
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
</small>
===Commodity prices===
IMF Index of Primary Commodity Prices,
(2005=100, in terms of US dollars)
:::::::{|class = "wikitable"
| colspan = "4" align = "center"|2007
| colspan = "4" align = "center"|2008
| colspan = "4" align = "center"|2009
|-
| Q1
| Q2
| Q3
| Q4
| Q1
| Q2
| Q3
| Q4
| Q1
| Q2
| Q3
| Q4
|-
| 118
| 130
| 137
| 154
| 172
| 203
| 197
| 117
| 99
| 114
| 126
| 136
|}
|}


::::::::::::::::::::::::                          * May
:::(Source: IMF [http://www.imf.org/external/np/res/commod/table1a.pdf])
 
===The oil price===
The price of crude oil on the New York Stock Exchange ($/barrel[http://www.nyse.tv/crude-oil-price-history.htm])
:::::::{|class = "wikitable"
!colspan = "2"|2007
!colspan = "2"|2008
!colspan = "2"| 2009
!colspan = "2"| 2010
|-
| January
| &nbsp;&nbsp;June&nbsp;&nbsp;
| January
| &nbsp;&nbsp;June&nbsp;&nbsp;
| January
| &nbsp;&nbsp;June&nbsp;&nbsp;
| January
| &nbsp;&nbsp;June&nbsp;&nbsp;
|-
|align="center"| 56
|align="center"| 65
|align="center"| 98
|align="center"| 139
|align="center"| 46
|align="center"| 68
|align="center"| 83
|align="center"| 72
|}


: (Source: OECD)[http://www.oecd.org/dataoecd/11/58/43687940.pdf]
===World trade===
: OECD  trade in goods and services
:: % value change on previous quarter (priced in US$).


:::::::{|class="wikitable"
!
!colspan = "4"|2008
!colspan = "4"|2009
!colspan = "4"|2010
|-
!
!Q1
!Q2
!Q3
!Q4
!Q1
!Q2
!Q3
!Q4
!Q1
!Q2
!Q3
!Q4
|-
!Exports
| 5.6
| 5.6
| -3.0
| -18.4
| -12.7
| 1.8
| 7.5
| 7.6
| 0.6
|
|
|
|-
!Imports
|6.2
|5.2
| -2.0
| -18.5
| -14.3
| -0.5
| 8.1
| 6.2
| 2.5
|
|
|
|}
::(Source: OECD economic indicators[http://www.oecd.org/dataoecd/10/47/44479849.pdf])
<small>
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
</small>
==Policy Actions==
===Central bank measures===
:::{|class = "wikitable"
!
! Federal Reserve Bank
! European Central Bank
! &nbsp;&nbsp;Bank of Japan&nbsp;&nbsp;
! &nbsp;&nbsp;Bank of England&nbsp;&nbsp;
|-
! Lowering policy rates
to very low levels
|Align = "center"|X
|Align = "center"|De facto
|Align = "center"|X
|Align = "center"|X
|-
! Increasing liquidity provision
to financial institutions
|Align = "center"|X
|Align = "center"|X
|Align = "center"|X
|Align = "center"|X
|-
! Intervening directly in wider
segments of the financial market
|Align = "center"|X
|Align = "center"|X
|Align = "center"|X
|Align = "center"|X
|-
! Purchasing long-term
government bonds
|Align = "center"|X
|Align = "center"|
|Align = "center"|X
|Align = "center"|X
|-
!Supporting specific
institutions
|Align = "center"|X
|Align = "center"|
|Align = "center"|X
|Align = "center"|X
|}
:Source: OECD Economics Working Papper No 753 February 2010[http://www.oecdilibrary.org/docserver/download/fulltext/5kml6xm7qgs6.pdf?expires=1271935601&id=0000&accname=freeContent&checksum=4409F41DDF3E1725FB09A73F274F2806]
<small>
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
</small>
===[[Fiscal stimulus]] packages===
===[[Fiscal stimulus]] packages===
: ( % of GDP)
: % of GDP


:::::::::{|class = "wikitable"
:::::::::{|class = "wikitable"
Line 266: Line 591:
|align="center"|1.3
|align="center"|1.3
|align="center"|2.7
|align="center"|2.7
|-
|align="center"|China
|align="center"|0.4
|align="center"|2.0
|align="center"|2.0
|align="center"|4.4
|}
|}


::(Source: IMF estimates February 2009 [http://www.imf.org/external/np/pp/eng/2009/020109.pdf])
::(Source: IMF estimates February 2009 [http://www.imf.org/external/np/pp/eng/2009/020109.pdf])
<small>
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
</small>
==Debt==


===Public debt===
===Public debt estimates===
:([[National debt]] % of GDP )
:([[National debt]]
:: % of GDP )


:::{|class = "wikitable"
:::{|class = "wikitable"
Line 323: Line 659:


::(Source: IMF Staff Position Note November 2009 [https://www.imf.org/external/pubs/ft/spn/2009/spn0925.pdf])
::(Source: IMF Staff Position Note November 2009 [https://www.imf.org/external/pubs/ft/spn/2009/spn0925.pdf])
 
<small>
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
</small>
===Total debt===
===Total debt===


(% of GDP 2008)
: % of GDP 2008


:::{|class = "wikitable"
:::{|class = "wikitable"
Line 386: Line 724:
|}
|}


:(Source: ''Debt and Deleverageing, the Global Credit Bubble and its Consequences'', McKinsey, 2010)
:(Source: ''Debt and Deleverageing, the Global Credit Bubble and its Consequences'', McKinsey, 2010[http://www.mckinsey.com/mgi/reports/freepass_pdfs/debt_and_deleveraging/debt_and_deleveraging_full_report.pdf])
 
<small>
 
[[Recession of 2009/Addendum#Selected economic statistics|RETURN TO THE TOP]]
==International recession and recovery by region==
</small>
 
===The World===
 
The [[crash of 2008]] had an adverse effect upon most of the world's economies, but in 2008 it was only the more vulnerable of the industrialised economies that seemed likely to suffer major downturns.  By the spring of 2009, however,  most of  the world's economies were facing severely damage. The  United States and United Kingdom economies had at first  suffered more seriously than most because of collapsing  housing and consumer credit booms but it soon became apparent that more serious downturns were threatening the economies of Japan and Germany. Neither had experienced such booms, but both had  proved to be  exceptionally vulnerable to reductions in foreign demand for their exports resulting from reductions in world trade (which is estimated to have fallen  by 7 per cent in the 4th quarter of 2008) - and particularly trade in capital goods. Most of the other developed  economies (except Spain and Ireland)  were also relatively free of such problems, but  they too were damaged by loss of exports. The economies of commodity-exporting countries in Eastern Europe, the Middle East and South America  suffered mainly from  falls in commodity prices, and some other emerging economies  were also damaged by the withdrawal of capital inflows from the developed economies.
 
===America===
 
====The United States====
 
By early 2009, the United States economy was suffering from a severe lack of demand. Three and a half million jobs had been lost in just over a year and businesses were responding to falling demand by laying off workers or cutting back on their hours or wages, causing families to further reduce their demand and businesses to respond with yet more layoffs and cutbacks. The problem was being  made worse by the inability of the financial system  to provide the credit necessary for recovery, and the resulting "credit crunch" was causing more job losses and further declines in business activity, which, in turn, was adding more pressure on the financial system. Two and a half  million families  had faced foreclosure in the previous  year, and the reductions in personal wealth resulting from the fall in  house prices were causing further reductions in demand<ref>Based on Treasury Secretary [http://www.ustreas.gov/press/releases/tg50.htm Tim Geithner's statement] to the Senate Finance Committee  March 4 2009</ref>. Reports from the twelve Federal Reserve Districts  in March suggested  that national economic conditions deteriorated further during the reporting period of January through late February. Ten of the twelve reports indicated weaker conditions or declines in economic activity. The deterioration was broad based, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions. Looking ahead, contacts from various districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.  The availability of credit generally remained tight. Lenders continued to impose strict standards for all types of loans, with scattered reports of further tightening and particular scrutiny focused on construction projects and commercial real estate transactions.<ref>[http://www.federalreserve.gov/fomc/beigebook/2009/20090304/fullreport20090304.pdf Federal Reserve "Beige Book", March 2009]</ref>
 
====Canada====
 
====Central and Southern America====
 
===Europe===
 
====United Kingdom====
The rapid growth of the British economy in the early years of the 21st century had been partly due to the success of its comparatively large financial sector and to the development of a  comparatively vigorous housing boom, and those factors had a strong influence upon the impact of the recession that followed the collapse of the Lehman Brothers bank in the United States. Even before that collapse, some of its banks had been forced to make large writedowns because of their involvement in the [[subprime mortgages crisis]] and there had been a run on one of them <ref>[http://news.bbc.co.uk/2/hi/business/6996136.stm ''Rush on Northern Rock Continues'', BBC News 17 September 2007]</ref>, but the banking panic that followed the fall of Lehman Brothers, threatened the continued existence of the financial system. In October 2008  the British Government announced a £500 billion rescue scheme <ref>[http://news.bbc.co.uk/2/hi/business/7658277.stm Rescue Plan for UK Banks Unveiled, BBC News 8 October 2008]</ref>,  including powers to take equity stakes in ailing banks and an undertaking to guarantee interbank loans. An impending collapse of the UK's financial system was averted, but the surviving banks adopted a policy  of [[Leverage|deleveraging]] that resulted in a severe [[credit crunch]] followed by a general economic downturn. In the second half of 2008  gdp fell by 2.2  per cent  with falls in financial sector output and  in  housing  and commercial investment.  The effective exchange rate fell by about 20 per cent  during  2008,  but its effect was more than offset by falling overseas demand, and there was also a fall in  exports.  Early [[fiscal policy]] and [[monetary  policy]] action was taken to tackle  the growing recession . A  [[fiscal stimulus]]  amounting to 1.4 per cent of GDP was introduced by  the November Pre-Budget Report, including a temporary 2.5 percentage point reduction in [[Taxation#Taxes on consumption|value-added tax]] and a bringing forward of £3 billion of capital investment, and by March 2009 the Bank of England  had reduced its  [[discount rate]] rate  from 5% to 0.5% and begun a programme of  [[quantitative easing]].  The UK’s [[national debt]] had been  comparatively  low at the outset of the recession (See  the [[/Addendum#National debt|national debt comparison on the addendum subpage]]), but there was subsequently  a  large increase in the [[budget deficit]],  over 80 percent of which was  due to  the operation of [[automatic stabilisers]].
 
In its  pre-budget report of 2008 and its budget of 2009 the Government planned  a [[fiscal tightening]] that would increase gradually to 6.4% of national income over eight years. Their plans included a  reduction in [[public expenditure]]  of £35 billion which, together with tax increases, would  reduce  borrowing by 3.2% of GDP by 2014.  The Institute of Fiscal Studies estimates that, under those plans, the[[national debt]] would roughly double from pre-crisis levels, to a little under 80% of national income, before declining again to its pre-crisis levels by the early 2030s<ref>[http://www.ifs.org.uk/bns/bn87.pdf. Robert Chote et al: ''Britain's Fiscal Squeeze, the Choices Ahead'', IFS Briefing Note BN87, September 2009]</ref>. In September, the opposition Conservative party (the party that is expected to take over government in 2010) announced plans to make expenditure reductions of only £7 billion by 2014, but the right-wing Centre for Economic and Business Research assumes that a Conservative Chancellor would  take earlier action than that planned by the Government,  cutting public expenditure by £80 billion and raising taxes by £20 billion<ref>[http://www.cebr.com/Resources/CEBR/The%20economics%20of%20George%20Osborne.pdf Douglas McWilliams: ''The Economics of George Osborne'', CEBR, 6 October 2009]</ref>.
 
====The Eurozone====
 
 
====Germany====
The international banking panic had an immediate impact on Germany's fragmented banking system and in  October 2008 the government set up a fund to guarantee the  banks' debts and provide for  recapitalisation and  asset purchases. Although there had been falls in national output  earlier in the year, the government did not at first consider further action  to be necessary, but by the end of the year a fall in exports signalled the onset of major downturn, and in January of 2009 it launched a major fiscal stimulus (amounting eventually to 3.5 per cent of gdp) that included reductions in income, and payroll taxes(starting in July) as well as  industrial subsidies and infrastructure investments. Those discretionary actions together with the action of the automatic stabilisers were expected to increase the budget deficit to  7% of GDP by  2010. Forecasters expect the downturn of the German economy to be deeper than those of other major industrialised countries except Japan.
 
====France====
The government adopted a fiscal stimulus amounting to over 1% of GDP, including infrastructure spending, measures to relieve cash-flow difficulties for small and medium-sized enterprises,  tax holidays  for low-income households, increased unemployment compensation, and loans to the car and aircraft industries. Together with the operation of automatic stabilisers, these measures are expected to raise the budget deficit to above 8% of gdp by 2010
 
====Italy====
 
====Iceland====
Before the Lehman Brothers collapse in September 2008, Iceland  had a thriving economy, its government had a budgetary surplus, its banks had no toxic assets and its consumers had not indulged in any speculative bubbles. (Although Willem Buiter and Anne SIbert <ref> Willem Buiter and Anne SIbert: ''The Icelandic Banking Crisis and
What To Do About It'', Policy Insight No 26, Centre for Economic Policy Research, October 2008[http://www.cepr.org/pubs/PolicyInsights/PolicyInsight26.pdf]</ref>, believed  that  its banking model was not viable).  A few months later its banking system had collapsed, its government was deeply in debt, its currency had suffered a  65 per cent depreciation, real earnings had fallen by 18 per cent, and its economy was facing a deep and prolonged recession. Those were the consequences of the impact of the international credit crunch on a banking system that had overseas debts amounting to almost ten times the country's GDP. Unable to ''roll over'' their debts, three of its largest banks had to be rescued by the government, and the consequent rise in national debt caused a flight from the national currency that made matters worse. A loan was obtained from the International Monetary Fund and recovery is expected during 2011 <ref>[http://www.imf.org/external/pubs/ft/scr/2008/cr08362.pdf ''Country Report No. 08/362'', International Monetary Fund, November 2008]</ref>. In November 2009 Moody's downgraded Iceland to its lowest investment grade.
 
====Ireland====
A downturn in the output of the formerly booming Irish construction industry  that started in 2007, intensified and developed into a full-blown  economic recession in the course of 2008 and  construction and property companies  began to default on loans from the banks. News of their defaults made foreign banks and investors, that had been the banks' principal source of short-term finance, reluctant to risk further commitments, and a banking crisis developed.  Consumer confidence fell and there was a very sharp increase in unemployment<ref>[http://www.economist.com/displayStory.cfm?story_id=12664671 ''The Tiger Tamed'', The Economist, November 2008]</ref><ref>[http://www.economist.com/displayStory.cfm?story_id=13331143. ''The Party is Definitely Over'', The Economist March 19 2009]</ref>. In an attempt to restore confidence, the Irish government undertook to  guarantee loans to the banks.  The  budget balance fell sharply from a surplus of 3 per cent of GDP in 2006 to  a deficit of over 6 per cent in 2008, and  foreign investors became wary  of a ''sovereign default'', and the government's ability to finance the deficit was threatened by a general loss of confidence.  In March 2009 the Standard and Poor rating agency downgraded its rating for Ireland from AAA to AA+<ref>[http://ftalphaville.ft.com/blog/2009/03/30/54198/sp-strips-ireland-of-its-triple-a-rating/ Stacy-Marie Ishmael: ''S&P strips Ireland of its triple-A rating'', FT-Alphaville, March 30 2009]</ref>, and April, the government decided that the only way to restore confidence was to take steps to reduce its deficit - and took the extraordinary step of increasing taxation in the midst of a recession <ref> [http://www.oireachtas.ie/viewdoc.asp?fn=/documents/ThisWeek/Budget/document1.htm  Budget Statement,  Department of Finance, April 7, 2009]</ref>. Additional steps taken included direct purchase of stock in some banks and the establishment of the "National Asset Management Agency" - essentially a government-owned bank that will buy [[toxic debt]] from six financial institutions - both steps aimed at improving their balance sheets and freeing up capital.<ref>{{cite web |url=http://www.finance.gov.ie/viewdoc.asp?DocID=5769 |title=Minister for Finance, Mr Brian Lenihan, TD, announces appointment of interim Managing Director of the National Asset Management Agency |accessdate=2009-05-12 |author=Department of Finance, Ireland |authorlink= |coauthors= |date= |year= |month= |format=html |work= |publisher= |pages= |language= |archiveurl= |archivedate= |quote= }}</ref><ref>{{cite web |url=http://www.moneyguideireland.com/nama-national-asset-management-agency.html |title=NAMA - National Asset Management Agency |accessdate=2009-05-12 |author=Money Guide Ireland |authorlink= |coauthors= |date= |year= |month= |format= |work= |publisher= |pages= |language= |archiveurl= |archivedate= |quote= }}</ref>
 
GDP growth rates averaging about 6 percent over the period 1995-2007 were followed by year-on-year falls of 8 percent in the 4th quarter of 2008 and 9 per cent in the first quarter of 2009, and the HCIP inflation rate fell to -3 per cent in September 2009.
 
====Russia====
The fall in the oil price combined with the collapse in world trade and a withrawal of international credit had a devastating effect upon the Russian economy, and its GDP fell by about 10 percent in the first half of 2009
<ref>[http://www.oecd.org/document/59/0,3343,en_2649_33733_43278011_1_1_1_1,00.html ''Economic Survey of Russia 2009'', OECD July 2009]</ref>, and its 2009 GDP is estimated to be 8.5 per cent below its 2008 level. These events prompted the central bank to inject large amounts of liquidity into the banking sector and to permit a gradual depreciation of the rouble by about 25 per cent against the dollar-euro basket. The Government launched a major fiscal stimulus in April 2009, consisting mainly of social transfer payments[http://www.ebrd.com/pubs/econo/tr09a.pdf].
 
====Estonia, Latvia and Lithuania====
Years of boom were followed  by falls in GDP averaging 1.8 per cent in 2008 and 15.5 per cent in 2009.
 
===Asia===
 
====Japan====
Japan has suffered a much deeper recession than the other large industrialised economies mainly because of its greater reliance upon exports of cars and high-technology products. Output was also restricted by a credit crunch and by the need to reduce high inventory levels <ref>[http://www.imf.org/external/pubs/ft/spn/2009/spn0905.pdf Martin Sommer: ''Why Has Japan Been Hit So Hard by the Global Recession?'', Staff Note SPN/09/05, International Monetary Fund, March 18, 2009]</ref>.
 
====China====
 
====Australia====
In 2009 there was a revival in exports to emerging markets, growth  in consumer demand and a recovery in housing and mortgage markets, and in October the central bank raised its discount rate to 3.25%
.
 
===Developing countries===
According to a World Bank report published in March 2009,  94 out of 116 developing countries had experienced a slowdown in economic growth in 2008. The most affected sectors were those that were that had been the most dynamic, typically urban-based exporters, construction, mining, and manufacturing<ref>[http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22093316~menuPK:34463~pagePK:34370~piPK:34424~theSitePK:4607,00.html. ''Crisis Reveals Growing Finance Gaps for Developing Countries'', World Bank, 8th March 2009]</ref>.




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Latest revision as of 05:11, 24 April 2012

Selected economic statistics

Growth rates

GDP at constant market prices
% change on previous period
2007 2008 2009 2010 2011
2006 2007 2008 2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
United States 2.8 2.0 0.4 -2.4 0.0 1.2 1.6 0.0 0.2 0.7 -0.1 -1.4 -1.2 -0.2 0.4 1.2 0.9 0.9 0.6 0.6 0.1 0.3 0.5 0.7
Japan 2.0 2.4 -0.6 -5.3 1.0 -0.3 0.4 1.0 0.3 -1.2 -0.4 -3.2 -4.2 1.7 0.1 1.1 1.2 1.3 0.6 -0.6 -1.8 -0.3 1.7 -0.2
Canada 3.1 2.7 0.5 -2.6 1.0 1.0 0.6 0.2 -0.2 0.1 0.2 0.8 -1.4 -0.6 0.1 1.2 1.5 0.6 0.6 0.8 0.9 -0.2 1.0 0.4
United Kingdom 2.8 3.0 0.7 -4.8 0.8 0.8 0.6 0.9 0.3 0.0 -0.7 -1.6 -2.3 -0.7 -0.3 0.4 0.4 1.1 0.7 -0.5 0.2 -0.1 0.6 -0.3
Germany 3.0 2.5 1.3 -5.0 0.4 0.4 0.6 0.3 1.5 -0.5 -0.5 -2.1 -3.4 0.5 0.7 0.3 0.6 1.9 0.8 0.5 1.3 0.3 0.6 -0.2
France 2.2 2.2 0.8 -2.3 0.6 0.5 0.7 0.4 0.4 -0.3 0.1 -1.1 -1.5 0.1 0.3 0.6 0.2 0.7 0.4 0.4 0.9 0.0 0.3 0.2
Italy 2.0 1.6 -1.0 -5.0 0.2 0.1 0.2 -0.3 0.3 -0.6 -0.7 -2.1 -2.9 -0.3 0.4 -0.1 0.4 0.5 0.2 0.2 0.1 0.3 -0.2 -0.7
(Source: OECD, Main Economic Indicators)

Consumer prices

percentage increase on the same period of the previous year
2009
2008 2009  Mar   Jun   Sep   Dec 
United States 3.8 -0.4 -0.4 -1.4 -1.3 2.7
United Kingdom 3.6 2.2 2.9 1.8 1.1 2.8
France 2.8 0.1 0.3 -0.5 -0.4 0.9
Germany 2.6 0.4 0.5 0.1 -0.3 0.9
Italy 3.3 0.8 1.2 0.5 0.2 1.3
Japan 1.4 -1.4 -0.3 -1.8 -2.2 -1.3
G7 countries 3.2 -0.1 -0.1 -0.9 -1.0 1.8
(Source OECD[1] )

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Unemployment rates

OECD harmonised rates
% seasonally adjusted)
2009
2007 2008 2009   Q1    Q2    Q3    Q4 
United States 4.6 5.8 9.3 8.2 9.3 9.7 10.0
United Kingdom 5.3 5.5 7.6 7.1 7.7 7.8 7.7
Japan 3.9 4.0 5.1 4.5 5.1 5.1 5.2
Germany 8.4 7.3 7.5 7.3 7.6 7.6 7.5
France 8.3 7.9 9.4 8.9 9.3 9.5 10.0
(Source: OECD)[2]

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Commodity prices

IMF Index of Primary Commodity Prices, (2005=100, in terms of US dollars)

2007 2008 2009
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
118 130 137 154 172 203 197 117 99 114 126 136
(Source: IMF [3])

The oil price

The price of crude oil on the New York Stock Exchange ($/barrel[4])

2007 2008 2009 2010
January   June   January   June   January   June   January   June  
56 65 98 139 46 68 83 72

World trade

OECD trade in goods and services
% value change on previous quarter (priced in US$).
2008 2009 2010
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Exports 5.6 5.6 -3.0 -18.4 -12.7 1.8 7.5 7.6 0.6
Imports 6.2 5.2 -2.0 -18.5 -14.3 -0.5 8.1 6.2 2.5
(Source: OECD economic indicators[5])

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Policy Actions

Central bank measures

Federal Reserve Bank European Central Bank   Bank of Japan     Bank of England  
Lowering policy rates

to very low levels

X De facto X X
Increasing liquidity provision

to financial institutions

X X X X
Intervening directly in wider

segments of the financial market

X X X X
Purchasing long-term

government bonds

X X X
Supporting specific

institutions

X X X
Source: OECD Economics Working Papper No 753 February 2010[6]

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Fiscal stimulus packages

% of GDP
2008 2009 2010 Total
United States 1.1 2.0 1.8 4.8
United Kingdom 0.2 1.4 -0.1 1.5
Germany 0.0 1.5 2.0 3.4
France 0.0 0.7 0.7 1.3
Japan 0.4 1.4 0.4 2.2
Canada 0.0 1.5 1.3 2.7
China 0.4 2.0 2.0 4.4
(Source: IMF estimates February 2009 [7])

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Debt

Public debt estimates

(National debt
% of GDP )
   Japan       Italy       France      Germany    United States United Kingdom Average [1]
2007 188 104 64 63 62 44 78
2009 217 117 77 80 89 69 101
2010 219 116 78 79 85 69 99
2014 246 129 96 89 108 98 118
  1. ↑ average of advanced G20 countries
    2. (Source: IMF Staff Position Note November 2009 [8])

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    Total debt

    % of GDP 2008
    United Kingdom    Japan       France       Italy     United States    Germany   
    Government 52 188 73 101 60 69
    Financial institutions 202 108 81 77 56 76
    Non-financial businesses 114 96 110 81 78 66
    Households 101 67 44 40 56 47
    Total 469 459 308 298 290 274
    % growth 2000-08 10.2 0.3 7.7 6.3 8.1 2.5
    (Source: Debt and Deleverageing, the Global Credit Bubble and its Consequences, McKinsey, 2010[9])

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