Great Recession/Addendum: Difference between revisions

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==International recession and recovery by region==
==International recession and recovery by region==
===The World ===
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
!colspan="5"| GDP growth (%)(<ref name=world>[http://siteresources.worldbank.org/INTGEP/Resources/335315-1307471336123/7983902-1307479336019/Full-Report.pdf''Global Economic Prospects'', June 2011, World Bank]</ref>)
|-
!align="center"| 2007
!align="center"| 2008
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011
|-
|align="center"| 5.2
|align="center"| 1.7
|align="center"| -2.2
|align="center"| 3.8
|align="center"| 3.2
|}
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
!colspan="5"| Trade growth (vol%) (<ref name=world>[http://siteresources.worldbank.org/INTGEP/Resources/335315-1307471336123/7983902-1307479336019/Full-Report.pdf''Global Economic Prospects'', June 2011, World Bank]</ref>)
|-
!align="center"| 2007
!align="center"| 2008
!align="center"| &nbsp;2009&nbsp;
!align="center"| 2010
|align="center"| 2011
|-
|align="center"| 7.2
|align="center"| 3.2
|align="center"| -11.0
|align="center"| 11.5
|align="center"| 8.0
|}
The financial crisis had an adverse effect upon most of the world's economies. Those worst affected include the high income countries (The United States, Canada, Europe and Japan) with a collective GDP reduction in 2009 of 3.3 per cent. Output reductions between the peak in 2008 and the trough in 2009  were approximately 4 per cent of GDP in the United States, 6 percent in the United Kingdom, 6½ per cent in Italy, 7 per cent in Germany and 8½ per cent in Japan<ref> Rounded numbers from the chart on ''The Economist'' of 28th January 2010[http://www.economist.com/world/britain/displaystory.cfm?story_id=15393679]</ref>. Next in severity were the downturns of the developing economies (excluding China and India) with a collective GDP reduction of 2.2 per cent<ref name=world/> The recession had little effect on the  South Asian economies, and a comparatively small effect on the East Asian economies. Its  impact on the economies of China and India took the form only of significant growth rate reductions.


===The World===
The advanced [[G20]] countries  entered the recession in 2007 with a [[national debt|public debt]] averaging 78 per cent of  GDP (United Kingdom 44 per cent, United States 62, Germany 63, France 64, Italy 104, Japan 188), which is projected to rise to 118 per cent by 2014 (Germany 89 per cent , France 96, United Kingdom 98, United States 108, Italy 129, Japan 246 )<ref name=debt>[https://www.imf.org/external/pubs/ft/spn/2009/spn0925.pdf ''The State of Public Finances'', Cross-Country Fiscal Monitor: IMF Staff Position Note, November 2009]</ref>


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.  
Economic growth returned to most countries in the course of 2009 at or above pre-recession levels in most developing countries, but below pre-recession rates in many industrialised countries.


===America===
===America===
====The United States====
====The United States====
::::{|class = "wikitable"   
{|class = "wikitable"   


!  
!  
Line 16: Line 47:
!colspan = "4"|2009
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010


!align="center"| &nbsp;&nbsp;Q1&nbsp;&nbsp;
!align="center"| &nbsp; &nbsp;Q2&nbsp;&nbsp;
!align="center"| &nbsp;&nbsp;Q3&nbsp;&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 31: Line 67:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD> OECD StatExtracts at[http://stats.oecd.org/Index.aspx?datasetcode=SNA_TABLE1] & [http://stats.oecd.org/index.aspx?queryid=350]</ref>
| GDP (% change on previous quarter at an annual rate) <ref>[http://www.bea.gov/newsreleases/national/gdp/2011/pdf/gdp3q11_3rd.pdf GDP 3rd quarter of 2011, Bureau of Economic Analysis, December 2011 ] </ref>
|align="center"| 2.0  
|align="center"| 0.0
|align="center"| -2.7
|align="center"| 2.9
|align="center"| -6.7
|align="center"| -0.7
|align="center"| 1.7
|align="center"| 3.8
|align="center"| 3.9
|align="center"| 3.8
|align="center"| 2.3
|align="center"| 2.3
|align="center"| 0.4
|align="center"| 0.4
|align="center"| -2.5
|align="center"| 1.3
|align="center"| -1.6
|align="center"| 1.8
|align="center"| -0.2
|align="center"| 2.8
|align="center"| 0.6
|align="center"| 1.4
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
| Unemployment (% of labour force)<ref name=u> seasonally adjusted [http://www.oecd.org/dataoecd/20/21/44746304.pdf]</ref>  
| Unemployment (% of labour force)<ref> seasonally adjusted Bureau of Labor Statistics data[http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?series_id=LNS14000000]</ref>  
|align="center"| 4.6
|align="center"| 5.8
|align="center"| 5.8
|align="center"| 9.3
|align="center"| 9.3
|align="center"| 9.6
|align="center"| 8.2
|align="center"| 8.2
|align="center"| 9.3
|align="center"| 9.3
|align="center"| 9.7
|align="center"| 9.7
|align="center"| 10.0
|align="center"| 10.0
|align="center"|  
|align="center"| 9.7
|align="center"|  
|align="center"| 9.6
|align="center"|  
|align="center"| 9.7
|align="center"|  
|align="center"| 9.6
|align="center"| 8.9
|align="center"| 9.1
|align="center"| 9.1
|align="center"| 8.7
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=p> mid-quarter figures [http://stats.oecd.org/Index.aspx?querytype=view&queryname=221 (OECD)]</ref>
|align="center"|  
|align="center"| 3.8
|align="center"|  
|align="center"| -0.4
|align="center"|  
|align="center"| 1.6
|align="center"|  
|align="center"| 0.2
|align="center"|  
|align="center"| -1.3
|align="center"|  
|align="center"| -1.6
|align="center"|
|align="center"| 1.4
|align="center"|  
|align="center"| 2.4
|align="center"|  
|align="center"| 1.8
|align="center"|  
|align="center"| 1.2
|align="center"|
|align="center"| 1.3
|align="center"| 2.1
|align="center"| 3.4
|align="center"| 3.8
|align="center"| 3.4
|}
|}
The growth rate of American economy slowed sharply from around 3 per cent in 2006 to  2 per cent in 2007  and the economy continued to operate at below its trend rate of growth until the fourth quarter of 2009. Following the bursting of the house price [[bubble (economics)|bubble]] and the development of the [[subprime mortgage crisis]] in 2007,  two and a half  million families  faced foreclosure in 2008, and the reductions in personal wealth resulting from the fall in  house prices were causing further reductions in demand.  The  financial [[crash of 2008]], and the resulting [[credit crunch]], caused  further declines in business activity, which added more pressure on the financial system  and three and a half million Americans lost their jobs in the course of 2008<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>.  Credit  remained tight in 2009 with lenders  imposing strict standards for all types of loans <ref>[http://www.federalreserve.gov/fomc/beigebook/2009/20090304/fullreport20090304.pdf Federal Reserve "Beige Book", March 2009]</ref> and unemployment continued to rise throughout the year. By the second quarter of 2011 real GDP per person was 4 percent below its level in the 4th quarter of 2007 and 10 per cent below its 1997-2007 trend line<ref name="depth">[http://www.economist.com/node/21526392 ''Checking the depth gauge'', The Economist, 20th August 2011]</ref>
The Federal Reserve Bank introduced a range of [[Recession of 2009/Addendum#Central bank measures|emergency measures]], including [[discount rate]] reductions and [[credit easing]] that resulted in an increase in the [[monetary base]] of approximately 140 per cent over its pre-crisis level by the end of 2009
<ref name=base>[http://www.oecdilibrary.org/docserver/download/fulltext/5kml6xm7qgs6.pdf?expires=1271935601&id=0000&accname=freeContent&checksum=4409F41DDF3E1725FB09A73F274F2806] Minegishi and Cournède:, ''Monetary Policy Responses to the Crisis and Exit Strategies'', Economics Department Working Paper No. 753, OECD, Febtuary 2010]</ref>, and the government introduced a [[fiscal stimulus]] package that is estimated to total 4.8 per cent of GDP
<ref name=fiscal>[http://www.imf.org/external/np/pp/eng/2009/020109.pdf ''The Size of the Fiscal Expansion: An Analysis for the Largest Countries'', International Monetary Fund, February 2009]</ref>.
The  Federal [[budget deficit]] rose sharply  under the operation of the economy's [[automatic stabilisers]], and by 2010 the [[national debt|public debt]] had risen from its 2007 level of 62 percent of GDP to over 90 per cent<ref name=debt/> which is projected to rise to 108  percent by 2014<ref name=debt/>. The country's total debt in 2008 was 290 per cent of GDP (made up of government debt 60 per cent, household debt 78 per cent and business debt 152 per cent)
<ref name = McKinsey>[http://www.mckinsey.com/mgi/reports/freepass_pdfs/debt_and_deleveraging/debt_and_deleveraging_full_report.pdf Charles Roxburgh et al: ''Debt and deleveraging: The global credit bubble and its economic consequences'', The McKinsey Global Institute, January 2010]</ref>. On August 10 2010, after a contentious debate, the [[Federal Reserve Board]] decided to maintain its
$2.05 trillion stock of mortgage debt and U.S. Treasury holdings, in view of fears of a second [[downturn (economic)|downturn]]<ref>[http://online.wsj.com/article/SB10001424052748703589804575446262796725120.html?mod=WSJ_hpp_LEFTWhatsNewsCollection Jon Hilsenrath: ''Fed Split on Move to Bolster Sluggish Economy'', Wall Street Journal, August 24, 2010]]</ref>.
On August 1 2011 the Congress agreed to raise the federal debt ceiling by up to $2.4tn and make budget savings worth a similar amount over 10 years<ref>[http://www.cbo.gov/doc.cfm?index=12357 ''Analysis of the August 1 Budget Control Act'', Congressional Budget Office, 1 August 2011]</ref>.
The Congressional Budget Office estimate that effect of a broadly similar "illustrative policy" would  be to decrease output  in 2012, 2013, and 2014 by amounts ranging from roughly 0.1 percent to 0.6 percent. Beyond 2014, the  policy would lead to gains in GNP amounting the years from 2019 through 2021,  by roughly 0.5 percent to 1.4 percent<ref>[http://www.cbo.gov/doc.cfm?index=12310 ''The Macroeconomic and Budgetary Effects of an Illustrative Policy for Reducing the Federal Budget Deficit'', Congressional Budget Office, July 2011]</ref>. An IMF comment took the view that "the planned spending cuts are appropriately phased and not overly frontloaded so as not to undermine growth"<ref>[http://www.imf.org/external/np/sec/pr/2011/pr11301.htm ''IMF Statement on U.S. Agreement to Raise Debt Ceiling'', IMF Press Release No. 11/301, August 2, 2011]</ref>.


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>
The World Bank's January 2012 forecast shows a GDP growth rate of 2.2 per cent for 2012 [[Global stagnation/Addendum#Growth rates|(table)]].
 
   
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====Canada====
====Canada====
::::{|class = "wikitable" 


!
The Canadian [[mortgage]] market did not experience the surge in [[Default (finance)|defaults]] that triggered the [[subprime mortgage crisis]] in the United States, and the subsequent financial [[crash of 2008]] had little effect upon the Canadian financial system. Events in the United States nevertheless affected the rest of the Canadian economy. The economic growth rate faltered in the Autumn of 2007 as exports fell in response to  falling demand from the United States, and the downturn developed into a sharp contraction, led by falling investment and household spending, in the last quarter of 2008. The government introduced [[fiscal stimulus]] measures amounting to 4 per cent of GDP spread over the three years 2008-10, and a modest recovery started in the second half of 2009. By the second quarter of 2011 real GDP per person was 1 percent below its level in the 4th quarter of 2007 and 9 per cent below its 1997-2007 trend line<ref name="depth"/>.
!colspan = "3"|
 
!colspan = "4"|2009
====Central and Southern America====
!colspan = "4"|2010
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
|
!colspan="5"| GDP growth (%)<ref name=world/>
|-
|-
!
|
!align="center"| 2007  
!align="center"| 2007  
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
 
!align="center"| 2010
!align="center"| &nbsp; Q1&nbsp;
|align="center"| 2011
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
! Mexico
|align="center"| 2.7
|align="center"| 3.3
|align="center"| 0.5
|align="center"| 1.4
|align="center"| -2.6
|align="center"| -6.1
|align="center"| -1.8
|align="center"| 5.5
|align="center"| -0.9
|align="center"| 4.4
|align="center"| 0.2
|align="center"| 1.2
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
| Unemployment (% of labour force)<ref name=u/>
! Brazil
|align="center"| 6.0
|align="center"| 5.7
|align="center"| 6.1
|align="center"| 5.1
|align="center"| 8.3
|align="center"| -0.7
|align="center"| 7.8
|align="center"| 7.5
|align="center"| 8.4
|align="center"| 4.2
|align="center"| 8.5
|align="center"| 8.9
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
! Argentina
|align="center"|
|align="center"| 8.7
|align="center"|
|align="center"| 6.8
|align="center"|
|align="center"| 0.9
|align="center"|
|align="center"| 9.2
|align="center"|
|align="center"| 6.3
|align="center"|
|align="center"|
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"|
|}
|}
The Mexican economy suffered from a sharp fall in Mexican workers' remittances from abroad<ref>[http://worldfocus.org/blog/2010/02/16/mexican-economy-hard-hit-by-drop-in-us-remittances/9714/ ''Mexican economy hard hit by drop in U.S. remittances'', World Focus, February 2010]</ref> and from the fall in the price of oil. In Brazil, GDP fell by 0.2 percent year-on-year in the first two quarters of the crisis period, but rebounded in the second and third quarter of 2009. In Argentina, GDP increased by 0.5 and 0.2 percent on an annualized basis in the second and third quarters of 2009<ref name=WBdev>[http://siteresources.worldbank.org/INTGEP2010/Resources/chapter-1.pdf ''Prospects for Developing Economies'', Global Economic Prospects Chapter1, World Bank, 21 January 2010]</ref>.


====Central and Southern America====
 
 
 
 
 
 
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


===Europe===
===Europe===
====The European Union====
{|class = "wikitable" align="right" cellpadding="10" style="width:55%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
|
!2007
!2008
!2009
!2010
!2011
!2012
|-
|GDP growth(%)<ref name=EEF>[http://ec.europa.eu/economy_finance/eu/forecasts/2012_autumn/statistical_en.pdf "Autumn Forecast 2011, European Commission]</ref>
|align = "center"| 3.2
|align = "center"| 0.3
|align = "center"| -4.2
|align = "center"| 2.0
|align = "center"| 1.5
|align = "center"| -0.3
|-
|Unemployment rate (%))<ref name=EEF/>
|align = "center"| 7.2
|align = "center"| 7.1
|align = "center"| 9.0
|align = "center"| 9.7
|align = "center"| 9.7
|-
|Consumer price change (%))<ref name=EEF/>
|align = "center"| 2.4
|align = "center"| 3.7
|align = "center"| 1.0
|align = "center"| 2.1
|align = "center"| 3.0
|}
The European economy emerged from a deep recession during 2009 and most national economies have since experienced continuous below-trend growth. However the  Polish economy escaped the recession, the [[Great Recession/Addendum#Greece|Greek economy]] has remained in recession, the [[Great Recession/Addendum#Portugal|Portuguese economy]] has suffered a [[downturn (economic)|downturn]], and the economies of Latvia, Romania, Bulgaria and Ireland are experiencing no more than a hesitant recovery. Unemployment rates in mid-2011 ranged  from 4 to 5 per cent in the Netherlands and Austria to over 20 per cent in Spain and the Baltic States.


==== The United Kingdom====
====The Eurozone====
::::{|class = "wikitable" 


!
{|class = "wikitable" align="right" width=55%
!colspan = "3"|
!colspan = "4"|2009
!colspan = "4"|2010
|-
!  
!  
!align="center"| 2007  
!align="center"| 2007  
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011
!align="center"| 2012
|-
| GDP (% change on previous year)<ref name=EEF/>
|align="center"| 3.0
|align="center"| 0.4
|align="center"| -4.2
|align="center"| 1.9
|align="center"| 1.4
|align="center"| -0.4
|-
| Unemployment (% of labour force)<ref name=EEF/>


!align="center"| &nbsp; Q1&nbsp;
|align="center"| 7.6
!align="center"| &nbsp; Q2&nbsp;
|align="center"| 7.6
!align="center"| &nbsp; Q3&nbsp;
|align="center"| 9.5
!align="center"| &nbsp; Q4&nbsp;
|align="center"| 10.1
!align="center"| &nbsp; Q1&nbsp;
|align="center"| 10.0
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| HICP consumer price index (% change on previous year)<ref name=EEF/>
|align="center"| 3.0
|align="center"| 2.1
|align="center"| 0.7
|align="center"| 3.3
|align="center"| -4.8
|align="center"| -2.6
|align="center"| -0.6
|align="center"| -0.3
|align="center"| 0.3
|align="center"| 0.3
|align="center"|  
|align="center"| 1.6
|align="center"|  
|align="center"| 2.6
|align="center"|  
|}
|align="center"|  
 
As reported below, the recession had widely differing impacts upon the economies of members of the [[eurozone]]  but all were subject to the [[monetary policy]] of the [[European Central Bank]]. In 2008/2009, the bank responded to the recession by reducing its [[discount rate]] in stages to a minimum of 1 per cent, and adopting a limited  amount of [[quantitative easing]], a policy that resulted in an increase in the [[monetary base]] of approximately 50 per cent over its pre-crisis level by the end of 2009<ref name=base/>.  The recession ended in  the third quarter of 2009 with a modest (0.3% quarter-on-quarter) increase in real GDP, and continued throughout 2010 and 2011.
 
With the return of economic growth, attention turned to [[fiscal policy]]. The EU's [[growth and stability pact]] required member governments to limit  their [[budget deficit]]s to  3 per cent of GDP and  their [[public debt]] to 60 per cent of GDP, but there had been numerous breaches. 
{|class = "wikitable" align="right" cellpadding="10" style="width:50%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
!colspan="6"| PIIGS debt  (% of GDP)
|-
|
! Portugal
! &nbsp;&nbsp;&nbsp;Italy&nbsp;&nbsp;&nbsp;
! &nbsp;Ireland&nbsp;
! &nbsp;Greece&nbsp;
! &nbsp;Spain&nbsp;&nbsp;
|-
! End 2009[http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-22042010-BP/EN/2-22042010-BP-EN.PDF]
| align="center"|77
| align="center"|116
| align="center"|64
| align="center"|115
| align="center"|53
|-
|-
| Unemployment (% of labour force)<ref name=u/>
! End  2010[http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-26042011-AP/EN/2-26042011-AP-EN.PDF]
|align="center"| 5.3
| align="center"| 93
|align="center"| 5.2
| align="center"| 119
|align="center"|
| align="center"| 96
|align="center"| 7.7
| align="center"| 143
|align="center"| 7.7
| align="center"| 60
|align="center"| 7.8
|align="center"|
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"|
|-
|-
|  
! End 2011[http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-15112012-AP/EN/2-15112012-AP-EN.PDF]
|align="center"|  
| align="center"| 108
|align="center"|  
| align="center"| 121
|align="center"|  
| align="center"| 106
|align="center"|  
| align="center"| 171
|align="center"|  
| align="center"| 69
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"| 
|}
|}
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 2014The 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>.
{|class = "wikitable" align="right" cellpadding="10" style="width:50%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
!colspan="6"|10 year [[Sovereign spread]] over German bonds, per cent
|-
|
! Portugal
! &nbsp;&nbsp;&nbsp;Italy&nbsp;&nbsp;&nbsp;
! &nbsp;Ireland&nbsp;
! &nbsp;Greece&nbsp;
! &nbsp;Spain&nbsp;&nbsp;
|-
! Q1 2010
| align="center"| ½
| align="center"| ½
| align="center"| 1½
| align="center"| 3½
| align="center"| ½
|-
! Q3 2011
| align="center"| 8
| align="center"| 3½
| align="center"| 8
| align="center"| 12
| align="center"| 3½
|}
Few member governments were in compliance with those limits by the end of 2009 <ref>[http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/288 ''Commission assesses stability and convergence programmes of fourteen EU Member States'', European Commission, 17 March 2010]]</ref>. Twelve member states had [[public debt]] ratios higher than 60% of GDP in 2009, including  France (77.6%) and Germany.(60.9%)<ref>[http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-22042010-BP/EN/2-22042010-BP-EN.PDF ''Provision of deficit and debt data for 2009 - first notification, Eurostat April 2010]</ref>. There was general agreement that priority should be given to the achievement of a rapid return to compliance with the agreed limits, and programmes of reductions in [[public expenditure]] and increases of taxation were put in hand. Concern nevertheless developed among bond market investors concerning the [[fiscal sustainability]] of some eurozone  members.
It became evident in early  2010 that, without external assistance, the Greek government would be forced to [[default (finance)|default]] on its debt, and in the course of 2010, investors' fears of [[sovereign default]] by other eurozone governments increased their cost of borrowing. Conditional loans to the governments of Greece, Ireland and Portugal, that were intended to give them time to bring about a return to fiscal sustainability, failed to reassure investors. In the latter half of 2011 it became evident that a default by the Greek government could no longer be avoided, and there were increases in the [[sovereign spread]]s of Spain and Italy that were attributed to contagion from Greece. In mid November there were increases in the bond yields of other eurozone countries including France, and on 24 November 2011 there was a partial failure of a German government bond auction. There were sharp falls in consumer and business confidence in the second half of 2011<ref>[http://www.bloomberg.com/apps/quote?ticker=EUCCEMU:IND ''European Commission Consumer Confidence Indicator Eurozone'', Bloomberg, January 2012]</ref><ref>[http://ec.europa.eu/economy_finance/db_indicators/surveys/documents/2011/bci_2011_12_en.pdf ''Business climate indicator and industrial production for the euro area'', European Commission, December 2011]</ref> and a general reduction in GDP growth rates. The World Bank's January 2012 forecast shows a GDP growth rate of 0.3 per cent for 2012 [[Global stagnation/Addendum#Growth rates|(table)]].


====The Eurozone====
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


::::{|class = "wikitable"   
==== The United Kingdom====
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 227: Line 353:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)
|align="center"|
|align="center"| 0.6
|align="center"| -3.9
|align="center"| -2.5
|align="center"| -0.1
|align="center"| -0.1
|align="center"| -4.9
|align="center"| 1.3
|align="center"| 1.5
|align="center"| 0.4
|align="center"| 0.4
|align="center"| 0.1
|align="center"| 1.2
|align="center"|  
|align="center"| 0.8
|align="center"|  
|align="center"| -0.5
|align="center"|  
|align="center"| 0.5
|align="center"|  
|align="center"| -0.1
|align="center"| 0.6
|align="center"| -0.4
|align="center"| -0.3
|align="center"| -0.4
|align="center"| 1.0
|align="center"| -0.3
|-
|-
| Unemployment (% of labour force)<ref name=u/>
| Unemployment (% of labour force)[http://www.oecd.org/std/labourstatistics/HUR_NR10e12.pdf]
|align="center"| 7.5
|align="center"| 5.6
|align="center"| 7.5
|align="center"| 7.6
|align="center"| 9.4
|align="center"| 7.8
|align="center"| 8.8
|align="center"| 8.0
|align="center"| 9.3
|align="center"| 7.8
|align="center"| 9.6
|align="center"| 7.8
|align="center"| 9.9
|align="center"| 7.8
|align="center"| 7.9
|align="center"| 7.7
|align="center"| 7.9
|align="center"| 8.1
|align="center"| 8.7
|align="center"| 8.3
|align="center"| 8.2
|align="center"| 8.1
|align="center"|  
|align="center"|  
|align="center"|
|align="center"|
|align="center"|
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=cp>[http://stats.oecd.org/Index.aspx?querytype=view&queryname=221 OECD StatEx]</ref>
|align="center"| 3.6
|align="center"| 2.2
|align="center"| 3.2
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 3.3
|align="center"|  
|align="center"| 3.4
|align="center"|  
|align="center"| 3.1
|align="center"|  
|align="center"| 3.4
|align="center"|  
|align="center"| 4.1
|align="center"|
|align="center"| 4.4
|align="center"|  
|align="center"| 4.7
|align="center"|  
|align="center"| 4.7
|align="center"|
|align="center"| 
|}
|}
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<ref>[http://www.oecdilibrary.org/docserver/download/fulltext/5ksf1pcn5bs4.pdf?expires=1272003015&id=0000&accname=freeContent&checksum=5714268DC1A9FBFE5BB780F3F257CF91 Philip Davis: ''Financial Stability in the United Kingdom: Banking on Prudence'', OECD Economics, Department Working Papers, No. 717, OECD Publishing, July 2009]</ref>  and to the development of a  comparatively vigorous housing boom<ref>[http://ec.europa.eu/economy_finance/publications/publication_summary13280_en.htm Robert Kuenzel and Birgitte Bjørnbak: ''The UK Housing Market: Anatomy of a house price boom'', EcFin Country Focus, October 2008]</ref>, 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.  By the second quarter of 2011 real gdp per person was 6 percent below its level in the 4th quarter of 2007 and 13 per cent below its 1997-2007 trend line<ref name="depth"/>.
The  Bank of England introduced a range of [[Recession of 2009/Addendum#Central bank measures|emergency measures]] including  [[discount rate]] reductions and [[quantitative easing]] that resulted in an increase in the [[monetary base]] of approximately 230 per cent over its pre-crisis level by the end of 2009
<ref name=base/> A  [[fiscal stimulus]]  amounting to 1.5 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.
The United Kingdom entered the recession in 2007 with a [[public debt]] of 44 per cent of its GDP,  which had risen to 62  per cent by 2010, about 30 per cent of which was held by overseas investors. In February 2010 its Parliament passed the ''Fiscal Responsibility Act''<ref>[http://www.opsi.gov.uk/acts/acts2010/en/ukpgaen_20100003_en.pdf Fiscal Responsibility Act, Stationery Office, February 2010]</ref> which imposed a duty on the Treasury to ensure that by the financial year ending 2014
public sector net borrowing as a percentage of GDP is at least halved from its level for the financial year ending 2010.
Following the replacement of the Labour government in 2010 by a Conservative/Liberal Democrat coalition government, the budget of June 2010 introduced proposals that were targeted to achieve that halving two years sooner<ref>[http://budgetresponsibility.independent.gov.uk/wordpress/docs/junebudget_annexc.pdf  ''Budget Forecast, June 2010'', Office for Budget Responsibility, 2010]</ref> and to result in a  fall  in national debt as a share of national income between 2014–15 and 2015–16. An analysis by economists of the Institute of Fiscal Studies suggests that neither target will be met
<ref>[http://www.ifs.org.uk/bns/bn136 Carl Emmerson and Gemma Tetlow ''Autumn Statement 2012: More fiscal pain to come?'', Institute of Fiscal Studies, November 24 2012]</ref>. In the June 2010 budget forecast, GDP was expected to rise by 2.8 per cent in 2012. That forecast was revised to 0.8 per cent in March 2012, and by November 2012, the average of independent forecasts was for a slight reduction in GDP in 2012, rising to 2 per cent by 2015. 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====Germany====
====Germany====
::::{|class = "wikitable"   
[http://www.imf.org/external/pubs/ft/scr/2012/cr12161.pdf IMF country report July 2012]
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 289: Line 447:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"| 2.5
|align="center"| 1.1
|align="center"| 1.3
|align="center"| -5.1
|align="center"| -5.0
|align="center"| 3.7
|align="center"| -3.5
|align="center"| 2.9
|align="center"| 0.6
|align="center"| 2.2
|align="center"| 0.7
|align="center"| 0.6
|align="center"| 1.2
|align="center"| 0.5
|align="center"| 0.4
|align="center"| 0.4
|align="center"| 0.7
|align="center"| -0.1
|align="center"| 0.0
|align="center"| 0.5
|align="center"|
|align="center"| 0.3
|align="center"|  
|align="center"| 0.2
|align="center"|  
|align="center"|-0.6
|align="center"|  
|-
|-
| Unemployment (% of labour force)<ref name=u/>
| Unemployment (% of labour force) [http://www.oecd.org/std/labourstatistics/HUR_NR10e12.pdf]
|align="center"| 8.4
|align="center"| 7.5
|align="center"| 7.5
|align="center"| 7.5
|align="center"| 7.8
|align="center"| 7.1
|align="center"| 6.0
|align="center"| 7.3
|align="center"| 7.3
|align="center"| 7.6
|align="center"| 7.0
|align="center"| 7.6
|align="center"| 6.7
|align="center"| 7.5
|align="center"| 6.7
|align="center"|  
|align="center"| 6.3
|align="center"|  
|align="center"| 6.0
|align="center"| 5.8
|align="center"| 5.7
|align="center"| 5.5
|align="center"| 5.5
|align="center"| 5.5
|align="center"|  
|align="center"|  
|align="center"|
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=cp/>
|align="center"| 2.8
|align="center"| 0.2
|align="center"| 1.1
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 0.8
|align="center"|  
|align="center"| 1.1
|align="center"|  
|align="center"| 1.2
|align="center"|  
|align="center"| 1.5
|align="center"|  
|align="center"| 2.1
|align="center"|
|align="center"| 2.3
|align="center"|  
|align="center"| 2.5
|align="center"|  
|align="center"| 2.3 
|align="center"|
|align="center"| 
|}
|}
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.
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. By the second quarter of 2011 real gdp per person was 2 percent above its level in the 4th quarter of 2007 but 3 per cent below its 1997-2007 trend line<ref name="depth"/>.
 
 
 
The government introduced a [[fiscal stimulus]] package that is estimated to total 3.4 per cent of GDP<ref name=fiscal/> 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 and raise the [[national debt]] from its 2007 level of 65 per cent of GDP to over 80 per cent by  2010<ref name=debt/>. The recovery in the second half of 2009 has been attributed by the OECD  to the [[fiscal stimulus]], expansionary monetary conditions, an upswing in world trade and restocking activities of companies<ref>[http://www.oecd.org/dataoecd/54/21/44855721.pdf ''Economic Survey of Germany'', OECD, March 2010]</ref>
but in view of the substantial [[output gap]] that remained at the end of 2009 they estimate that  the pre-crisis level of production will not be reached until 2013.
 
Germany entered the recession in 2007 with a [[national debt]] of 63 per cent of its GDP which is projected to rise to 101 percent by 2014<ref name=debt/>. In 2008, the country's total debt was 274 per cent of GDP (made up of government debt 69 per cent, household debt 66 per cent and business debt 138 per cent)<ref name = McKinsey/>
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====France====
====France====
::::{|class = "wikitable"   
[http://www.imf.org/external/pubs/ft/scr/2011/cr11211.pdf IMF country report, July 2011]         
 
[[Eurozone crisis/Addendum#France|France in the eurozone crisis]]
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
 
!align="center"| 2010
!align="center"| 2011
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 352: Line 540:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"| 2.2
|align="center"| -0.1
|align="center"| 0.8
|align="center"| -2.7
|align="center"| -2.3
|align="center"| 1.5
|align="center"| -1.4
|align="center"| 1.6
|align="center"| 0.3
|align="center"| 0.2
|align="center"| 0.2
|align="center"| 0.7
|align="center"| 0.4
|align="center"| 0.6
|align="center"| 0.6
|align="center"|  
|align="center"| 0.9
|align="center"|  
|align="center"| 0.0
|align="center"|  
|align="center"| 0.3
|align="center"|  
|align="center"| 0.0
|align="center"| 0.0
|align="center"| -0.1
|align="center"| 0.1
|align="center"|-0.3
|-
|-
| Unemployment (% of labour force)<ref name=u/>
| Unemployment (% of labour force)
|align="center"| 8.3
|align="center"| 7.8
|align="center"| 7.9
|align="center"| 9.5
|align="center"| 9.4
|align="center"| 9.8
|align="center"| 8.9
|align="center"| 9.8
|align="center"| 9.3
|align="center"| 9.9
|align="center"| 9.9
|align="center"| 9.7
|align="center"| 9.8
|align="center"| 9.6
|align="center"| 9.6
|align="center"| 9.6
|align="center"| 9.7
|align="center"| 9.8
|align="center"| 10.0
|align="center"| 10.0
|align="center"|  
|align="center"| 10.3
|align="center"|  
|align="center"| 10.6
|align="center"|  
|align="center"|
|align="center"|
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=cp/>
|align="center"| 0.7
|align="center"| 1.7
|align="center"| 1.6
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 1.3
|align="center"|  
|align="center"| 1.6
|align="center"|  
|align="center"| 1.5
|align="center"|  
|align="center"| 1.8
|align="center"|  
|align="center"| 1.8
|align="center"|
|align="center"| 2.1
|align="center"|  
|align="center"| 2.1
|align="center"|  
|align="center"| 2.4 
|align="center"|
|align="center"| 
|}
|}
The French economy suffered less from the recession than those of most of the other G7 countries. French banks were affected less than their counterparts in many other countries, primarily because they had diversified their activities and adopted more ,defensive prudential lending standards, and  household indebtedness  remained lower than in other countries. The measures taken by the government in October 2008 to boost the liquidity and solvency of the big banks were successsful in maintainng the functioning of the credit market
<ref>[http://www.oecd.org/dataoecd/20/32/42655601.pdf ''Economic Survey of France'', OECD, April 2009]</ref>. By the second quarter of 2011 real gdp per person was 2 percent below its level in the 4th quarter of 2007 and 8 per cent below its 1997-2007 trend line<ref name="depth"/>.


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
 
The government introduced a [[fiscal stimulus]] package that is estimated to total 1.3 per cent of GDP <ref name=fiscal/> 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.  
 
France entered the recession in 2007 with a [[national debt]] of 64 per cent of its GDP which is projected to rise to 96  percent by 2014<ref name=debt/>. In 2008, the country's total debt was 308 per cent of GDP (made up of government debt 73 per cent, household debt 110 per cent and business debt 125 per cent)<ref name = McKinsey/>
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====Italy====
====Italy====
::::{|class = "wikitable"   
 
[http://www.imf.org/external/pubs/ft/scr/2012/cr12167.pdf IMF country report, July 2012]
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 416: Line 632:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"| 1.6
|align="center"| -1.2
|align="center"| -1.0
|align="center"| -5.1
|align="center"| -5.0
|align="center"| 1.5
|align="center"| -2.4
|align="center"| 0.5
|align="center"| -0.5
|align="center"| 0.4
|align="center"| 0.5
|align="center"| 0.2
|align="center"| 0.1
|align="center"| 0.1
|align="center"| 0.3
|align="center"| 0.3
|align="center"| -0.3
|align="center"| -0.1
|align="center"|  
|align="center"| -0.7
|align="center"|  
|align="center"| -0.8
|align="center"|  
|align="center"| -0.7
|align="center"|  
|align="center"| -0.2
|align="center"| -0.9
|-
|-
| Unemployment(% of labour force)<ref name=u/>
| Unemployment (% of labour force)
|align="center"| 6.7
|align="center"| 7.8
|align="center"| 8.4
|align="center"| 8.1
|align="center"| 8.4
|align="center"| 8.5
|align="center"| 8.2
|align="center"| 8.3
|align="center"| 8.2
|align="center"| 8.2
|align="center"| 8.5
|align="center"| 9.2
|align="center"| 10.0
|align="center"| 10.6
|align="center"| 10.7
|align="center"|  
|align="center"|  
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=cp/>
|align="center"| 3.5
|align="center"| 0.8
|align="center"| 1.4
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 1.3
|align="center"|  
|align="center"| 1.4
|align="center"|  
|align="center"| 1.6
|align="center"|  
|align="center"| 1.8
|align="center"|  
|align="center"| 2.3
|align="center"|
|align="center"| 2,7
|align="center"|  
|align="center"| 2.8
|align="center"|  
|align="center"| 3.3 
|align="center"|
|align="center"| 
|}
|}
Italian banks were less exposed to high-risk products than those of other large countries because of their conservative behaviour and  their regulators' and supervisory caution, and there were no bank closures or rescues.
<ref>[http://www.oecd.org/dataoecd/59/6/42902825.pdf ''Economic Survey of Italy'', OECD, June 2009]</ref>. The economy nevertheless suffered a relatively severe recession. By the second quarter of 2011 real gdp per person was 6 percent below its level in the 4th quarter of 2007 and 9 per cent below its 1997-2007 trend line<ref name="depth"/>.
Italy entered the recession in 2007 with a [[national debt]] of 104 per cent of its GDP which is projected to rise to 129  percent by 2014<ref name=debt/>. In 2008, the country's total debt was 298 per cent of GDP (made up of government debt 117 per cent, household debt 81 per cent and business debt 303 per cent)<ref name = McKinsey/>
A [[spread]] of Italian government bonds over German government bonds developed in the course of 2010 and rose to over 3½ per cent by August 2011.
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====Iceland====
====Iceland====
::::{|class = "wikitable"   
{|class = "wikitable"   


!  
!  
Line 478: Line 717:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)
|align="center"| 5.6
|align="center"| 5.6
|align="center"| 1.7
|align="center"| 1.7
|align="center"| -7.0
|align="center"| -7.0
|align="center"| -4.2
|align="center"| -0.6
|align="center"| -2.7
|align="center"| -5.4
|align="center"| -0.3
|align="center"| -1,2
|align="center"| -3.1
|align="center"| 1.2
|align="center"| 1.2
|align="center"| -7.2
|align="center"| -1.6
|align="center"| 3.3
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
| Unemployment(% of labour force)<ref name=u/>
| Unemployment (% of labour force)  
|align="center"|  
|align="center"| 2.3
|align="center"|  
|align="center"| 3.0
|align="center"|  
|align="center"| 7.2
|align="center"|  
|align="center"| 7.2
|align="center"|  
|align="center"| 6.9
|align="center"|  
|align="center"| 7.3
|align="center"|
|align="center"| 7.7
|align="center"|  
|align="center"| 7.3
|align="center"|  
|align="center"| 6.8
|align="center"|  
|align="center"| 7.2
|align="center"|
|align="center"| 6.7
|-
|-
|
| Consumer prices (percent increase on the same period of the previous year)
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 5.1
|align="center"|  
|align="center"| 12.7
|align="center"|  
|align="center"| 17.1
|align="center"|  
|align="center"| 11.9
|align="center"|  
|align="center"| 11.1
|align="center"|
|align="center"| 8.6
|align="center"|  
|align="center"| 7.4
|align="center"|  
|align="center"| 7.1
|align="center"|  
|align="center"| 4.4
|align="center"|  
|align="center"| 2.8
|}
|}
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
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.
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<ref>[http://www.voxeu.org/index.php?q=node/4965  Thorvaldur Gylfason ''Iceland’s special investigation: The plot thickens'',  Vox, 30 April 2010]</ref>, 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<ref>[http://www.oecd.org/dataoecd/29/8/43455728.pdf ''Economic Survey of Iceland'', OECD, September 2009]</ref>. 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. In October 2009 an OECD economist reported that Iceland's  economy was in the midst of a deep recession; the exchange rate had plunged; capital flows had  been frozen; inflation was up;
public debt had risen; social needs had increased; and that the unemployment insurance fund was been nearly depleted<ref>[http://www.olis.oecd.org/olis/2009doc.nsf/LinkTo/NT000069CE/$FILE/JT03271427.PDF Andrea De Michelis: ''Iceland: Challenging Times For Monetary And Fiscal Policies'', Economics Department Working Paper No. 726, OECD October 2009]</ref>. In November 2009 the ''Moodys'' [[credit rating agency]] downgraded Iceland's government [[bond]]s to its lowest investment grade. The government had introduced [[fiscal stimulus]] measures amounting to 9.4 per cent of GDP spread over the two years 2009-10, a  loan was obtained from the International Monetary Fund and recovery was 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 a June 2010 press release, the IMF effectively approved the Government's fiscal policy with the statement that "the planned 3 percent of GDP fiscal adjustment can deliver a primary surplus and a reduction in Iceland’s public debt, provided budget implementation stays on track in 2010"<ref>[http://www.imf.org/external/np/sec/pr/2010/pr10262.htm ''Statement by the IMF Mission to Iceland'', International Monetary Fund, June 28, 2010]</ref>.
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====Ireland====
====Ireland====
::::{|class = "wikitable"   
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 542: Line 795:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"| 6.0
|align="center"| -3.0
|align="center"| -3.0
|align="center"| -7.5
|align="center"| -7.0
|align="center"| -2.1
|align="center"| -0.4
|align="center"| -0.8
|align="center"|  1.1
|align="center"| 0.3
|align="center"|  2.2
|align="center"|  
|align="center"|  -1.2
|align="center"|  
|align="center"|  0.5
|align="center"|  
|align="center"| -1.4
|align="center"|  
|align="center"|  1.9
|align="center"|  
|align="center"|  1.6
|align="center"| -0.5
|align="center"| 0.6
|align="center"|-0.7
|align="center"| 0.0
|align="center"|
|align="center"|
|-
|-
| Unemployment(% of labour force)<ref name=u/>
| Unemployment (% of labour force)  
|align="center"|  
|align="center"| 6.3
|align="center"|  
|align="center"| 11.9
|align="center"|  
|align="center"| 13.7
|align="center"|  
|align="center"| 14.4
|align="center"|  
|align="center"| 12.8
|align="center"|  
|align="center"| 13.1
|align="center"|
|align="center"| 13.7
|align="center"|  
|align="center"| 14.4
|align="center"|  
|align="center"| 14.2
|align="center"|  
|align="center"| 14.2
|align="center"| 14.7
|align="center"| 14.7
|align="center"| 14.8
|align="center"| 14.7
|align="center"| 15.0
|align="center"|  
|align="center"|  
|-
|-
|
|Consumer prices (percent increase on the same period of the previous year)<ref name=cp/> 
|align="center"|
|align="center"| 3.1
|align="center"|
|align="center"| 1.7
|align="center"|
|align="center"| -1.5
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"|   
|align="center"|   
|align="center"| -3.4
|align="center"| -1.4
|align="center"|  0.2
|align="center"| 0.9
|align="center"| 2.3
|align="center"| 2.8
|align="center"| 2.5
|align="center"| 2.8
|}
|}
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.
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 (finance)|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. 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 inflation rate fell to -3 per cent in September 2009. By the 2nd quarter of 2010, GDP per person was 12 per cent below its level in the 4th quarter or 2007<ref name="rec">[http://www.economist.com/blogs/dailychart/2011/08/gdp-recovery-recession ''GDP recovery since the recession'', The Economist online, Aug 18th 2011]</ref>
The government introduced [[fiscal stimulus]] measures amounting to 4.4 per cent of GDP spread over the three years 2008-10 which, combined with the effects of its [[automatic stabilisers]] is expected to raise the [[national debt]]  to over 80 per cent of GDP from its 2007 level of 28 per cent<ref name=debt/>. Foreign investors became wary  of the possibility  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'' [[credit 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>.
 
The report of an IMF consultation published in July 2010 concluded that the governments "aggressive measures" had helped gain policy credibility and stabilize the economy but that further long-haul efforts with  active risk management would be need to preserve policy credibility<ref>[http://www.imf.org/external/pubs/ft/scr/2010/cr10209.pdf. ''Ireland: 2010 Article IV Consultation'', International Monetary Fund, July 2010]</ref>. On August 24, 2010 the Standard and Poor's [[credit rating agency]] downgraded Ireland's debt for the 3rd time to AA- (following 3 downgrades by the Fitch agency and 2 by Moody's).
 
Ireland's economy suffered a second [[downturn (economic)|downturn]] in the second quarter of 2010 and the Government's financial position continued to deteriorate. In September 2010, its [[CDS spread]] reached a record 5 per cent. On the 22nd of November 2010 the government applied for financial assistance from the EU and the IMF<ref>[http://www.irishtimes.com/newspaper/breaking/2010/1121/breaking45.html ''Full text of the Government statement on its application for financial aid from the EU and IMF'', Irish Times, 22 November 2010]</ref> and on the 28th of Nonember, the Government announced the terms of the loan<ref>[http://www.merrionstreet.ie/wp-content/uploads/2010/11/Government-Statement-on-EU_IMF-programme.pdf ''Announcement of joint EU - IMF Programme for Ireland'', Government announcement, 28 November 2010]</ref>.
 
The National Recovery Plan of December 2010 aimed to consolidate public finances by 3.8% of GDP in 2011. Income tax bands werw to fall by 10%, and there were to be reductions in both current and capital expenditure.
 
The [[spread]] of Irish government bonds over German bonds had reached 8 percent by August 2011.
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


====Russia====
====Russia====
::::{|class = "wikitable"   
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
!colspan="5"| GDP growth (%)<ref name=world/>
|-
!align="center"| 2007
!align="center"| 2008
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011
|-
|align="center"| 8.1
|align="center"| 5.6
|align="center"| -7.8
|align="center"| 4.0
!align="center"| 4.4
|}
A [[Great Recession/Addendum#Crude oil price|fall in the oil price]] combined with the [[Recession of 2009/Addendum#World trade|collapse in world trade]] and a withdrawal of international [[credit (finance)|credit]] had a devastating effect upon the Russian economy in the first half of 2009, and its GDP fell by about 10 percent
<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>. That 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 payment]]s[http://www.ebrd.com/pubs/econo/tr09a.pdf]. The [[budget balance]] changed from a surplus of  4¼ per cent of GDP in 2008 to a deficit of 6¼ per cent in 2009 which the Government [[monetisation (of public debt)|monetised]] from reserves, leaving its [[national debt|public debt]] at the internationally low level of 11 per cent of GDP
<ref>[http://www.imf.org/external/np/sec/pn/2010/pn10105.htm ''IMF Executive Board Concludes 2010 Article IV Consultation with Russian Federation'', August 2, 2010]</ref><ref>[http://www.imf.org/external/pubs/ft/scr/2010/cr10246.pdf  ''Russian Federation: 2010 Article IV Consultation''. International Monetary Fund, July 2010]</ref>.
 
Russia's recession ended in the first quarter of 2010 with a GDP growth at a yearly rate of 3.3 per cent, followed in the second quarter by growth at a yearly rate of 5.2 per cent. By the 2nd quarter of 2011, real gdp per person was 2 percent above its level in the 4th quarter of 2007<ref name="rec"/>
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>
 
====The Baltic States====
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
|
!colspan="5"| GDP growth (%)
|-
|
!align="center"| 2007
!align="center"| 2008
!align="center"| &nbsp;2009&nbsp;
!align="center"| 2010e
|-
! Estonia
|align="center"| 7.2
|align="center"| -3.6
|align="center"| -14.7
|align="center"| -1.5
|-
! Lithuania
|align="center"| 9.8
|align="center"| 2.8
|align="center"| -14.8
|align="center"| 3.3
|-
! Latvia
|align="center"| 10.0
|align="center"| -4.6
|align="center"| -18.0
|align="center"| -4.0
|}
 
 
The  fastest-growing economies in  the European Union in 2006 became its three fastest-contracting economies in 2009. Years of boom were followed  by falls in GDP averaging  about 1½ per cent in 2008 and  about 16 per cent in 2009.  An International Monetary Fund report on Estonia noted that investment already started to slow in mid-2007, along with a bursting of the property [[bubble (economics)|bubble]], when the two main banks tightened lending conditions. The collapse of global external financing and foreign trade in the ''Lehman Brothers'' bankruptcy aftermath exacerbated the downturn.  Deflation and wage declines were projected to persist through 2010
<ref> ''Republic of Estonia: Staff Report for the 2009 Article IV
Consultation'', IMF Country Report No. 10/4, January 2010[http://www.imf.org/external/pubs/ft/scr/2010/cr1004.pdf]</ref>, but growth rates are expected to average between 2 and 5 per cent over the period 2010-14<ref>[http://ec.europa.eu/economy_finance/publications/occasional_paper/2010/pdf/ocp58_en.pdf. ''Economic policy challenges in the Baltics'', Occasional Papers No. 58, European Commission, February 2010]</ref>
<ref>[http://bookstore.piie.com/book-store/5218.html  Anders Åslund: ''The Last Shall Be the First: The East European Financial Crisis'', Peterson Institute, forthcoming]</ref>.
 
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>
 
====Greece====
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
 
!align="center"| 2010
!align="center"| 2011-
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 607: Line 955:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"|  
|align="center"| -0.2
|align="center"| 5.6
|align="center"| -3.2
|align="center"| -9.0
|align="center"| -3.5
|align="center"|  
|align="center"| -5.5
|align="center"|  
|align="center"| -0.6
|align="center"|  
|align="center"| -1.7
|align="center"|  
|align="center"| -1.6
|align="center"|  
|align="center"| -2.1
|align="center"|  
|align="center"|  0.2
|align="center"|  
|align="center"| -2.7
|align="center"|  
|align="center"| -0.7
|align="center"| -0.7
|-
|-
| Unemployment(% of labour force)<ref name=u/>
| Unemployment (% of labour force)  
|align="center"|  
|align="center"| 7.7
|align="center"|  
|align="center"| 9.5
|align="center"|  
|align="center"| 12.5
|align="center"|  
|align="center"| 16.6
|align="center"|  
|align="center"| 10.2
|align="center"|  
|align="center"| 11.0
|align="center"|
|align="center"| 12.9
|align="center"|  
|align="center"| 14.1
|align="center"|  
|align="center"| 15.1
|align="center"| 18.7
|align="center"| 18.4
|align="center"| 20.5
|align="center"| 21.7
|align="center"| 23.5
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"|  
|-
|-
|
| Consumer prices (% change on the same period of the preceding year)<ref name=cp/>
|align="center"| 4.2
|align="center"| 1.3
|align="center"| 4.6
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 3.0
|align="center"|  
|align="center"| 5.2
|align="center"|  
|align="center"| 5.5
|align="center"|  
|align="center"| 5.1
|align="center"|  
|align="center"| 4.7
|align="center"|
|align="center"| 3.5
|align="center"|  
|align="center"| 2.4
|align="center"|  
|align="center"| 2.8  
|align="center"|
|align="center"|  
|}
|}
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====
When Greece joined the [[Eurozone]] in 2001, it was less prosperous than the other members<ref>[http://www.indexmundi.com/g/r.aspx?c=gr&v=67  ''Country comparison GDP per capita (PPP), Index Mundi]</ref>, but its GDP grew more rapidly over the next seven years and fell less rapidly in the course of 2009. By the end of 2009, its unemployment rate had nevertheless risen in line with the European average and it was still suffering higher levels of poverty
Years of boom were followed by falls in GDP averaging 1.8 per cent in 2008 and 15.5 per cent in 2009.
<ref>[http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-18012010-AP/EN/3-18012010-AP-EN.PDF "Living conditions in 2008", Eurostat Newsrelease January 2010]</ref>. The economy remained in [[recession]] throughout 2010, and by the 2nd quarter of 2011, real gdp per person was 10 percent below its level in the 4th quarter of 2007<ref name="rec"/>


====Greece====
By the end of 2009, Greece's [[national debt]] had risen by about 25 per cent above its pre-crisis level of 100 per cent of GDP<ref name=debt/>. Concern about the [[Fiscal policy/Tutorials#Fiscal sustainability|sustainability]] of the government's  [[fiscal policy]] had led the  [[credit rating agency|credit rating agencies]] to downgrade the government's debt in January 2010, <ref>[http://www.bloomberg.com/apps/news?pid=20601087&sid=aklfQ2FM.8Zg&refer=home ''Greece’s Sovereign Credit Rating Cut to A- by S&P'', Bloomberg, January 14 2010]</ref>, and several times after that; and by early 2010 the cost of insuring against [[default (finance)|default]] by the Greek government rose  after  Moody’s Investors Service said the country’s economy  was facing a “slow death” from deteriorating finances<ref>[http://www.bloomberg.com/apps/news?pid=20601085&sid=akAKAwqEfcN0 ''Greek Default Risk Surges to Record Amid "Slow Death" Concern'', Bloomberg, 13 January 2010]</ref>.  The investor panic continued until, in April 2010, it was announced that the IMF and the Eurozone were prepared  to offer the government loans amounting in total to €110 billion over three years.
::::{|class = "wikitable"   
<ref>[http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/113563.pdf "Statement by the Heads of State and Governments of the Euro Area, 2 March 2010]</ref>
<ref>[http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/123&format=HTML&aged=0&language=EN&guiLanguage=en ''Statement on the support to Greece by Euro area Members States'', Europa, 11 April 2010]</ref><ref>[http://www.imf.org/external/np/sec/pr/2010/pr10187.htm ''IMF Executive Board Approves €30 Billion Stand-By Arrangement for Greece'', IMF Press Release No. 10/187, May 9, 2010]</ref>. In return, the Government was required to carry out a programme of fiscal contraction that was expected to drive its economy into a deep recession. The loan failed to reassure investors, and the CDS spread on Greek bonds rose from 4.8 per cent in April to 10 pre cent in November. In July 2011, Eurozone leaders and the International Monetary Fund agreed to lend Greece a further 109bn euros ($155bn, £96.3bn)<ref>[http://www.consilium.europa.eu//uedocs/cms_data/docs/pressdata/en/ec/123978.pdf Statement by  EZ Heads of State, 21 July 2011]</ref> Under the deal, private sector investors - that is, the banks and institutions that hold Greek bonds - are being asked to accept a 21% loss on the debt they hold.
 
====Spain====
[http://news.bbc.co.uk/1/hi/world/europe/country_profiles/991960.stm Country profile]  [http://www.imf.org/external/pubs/ft/scr/2012/cr12202.pdf IMF Country Report July 2012]
 
[[Eurozone crisis/Addendum#Spain|Spain in the eurozone crisis]]
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 674: Line 1,040:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"| 4.5
|align="center"| 0.9
|align="center"| 2.0
|align="center"| -3.7
|align="center"| -1.1
|align="center"| -0.1
|align="center"| -1.0
|align="center"| 0.7
|align="center"| 0.1
|align="center"| 0.3
|align="center"| 0.0
|align="center"| 0.2
|align="center"| 0.4
|align="center"| 0.2
|align="center"| 0.0
|align="center"| -0.5
|align="center"| -0.4
|align="center"| -0.4
|align="center"| -0.3
|align="center"| -0.3
|align="center"| -0.5
|align="center"| -0.7
|align="center"| -0.8
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
| Unemployment(% of labour force)<ref name=u/>  
| Unemployment (% of labour force)<ref name=EEF/>
|align="center"|  
|align="center"| 11.3
|align="center"| 18.0
|align="center"| 20.1
|align="center"| 20.9
|align="center"| 19.4
|align="center"| 20.1
|align="center"| 20.5
|align="center"| 20.5
|align="center"| 20.6
|align="center"| 20.9
|align="center"| 22.1
|align="center"| 23.0
|align="center"| 23.8
|align="center"| 24.6
|align="center"| 25.1
|align="center"|  
|align="center"|  
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=p/>
|align="center"| 4.1
|align="center"| -0.2
|align="center"| 1.7
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 1.1
|align="center"|  
|align="center"| 1.6
|align="center"|  
|align="center"| 1.0
|align="center"|  
|align="center"| 2.4
|align="center"|  
|align="center"| 3.7
|align="center"|
|align="center"| 3.7
|align="center"|  
|align="center"| 3.2
|align="center"|  
|align="center"| 2.8
|align="center"|
|align="center"| 
|}
|}


<ref>[http://www.voxeu.org/index.php?q=node/4465 Maria Grazia Attinasi,   Cristina Checherita, and   Christiane Nickel: ''What explains the surge in euro-area sovereign spreads during the financial crisis of 2007-09?'', European Central Bank, 11 January 2010]</ref>
The recession in Spain was shallower but more protracted than the European average, and the recovery, which started in the first quarter of 2010, has been described as "weak and fragile"<ref>[http://www.imf.org/external/pubs/ft/scr/2010/cr10254.pdf ''Country Report: Spain'', International Monetary Fund, July 2010]</ref>. By the 2nd quarter of 2011, real gdp per person was 5 percent below its level in the 4th quarter of 2007<ref name="rec"/>
Spain's unemployment rate was among the highest in Europe, reaching over 20 per cent in 2011. A major contributory factor was the bursting of a vigorous housing [[bubble (economics)|bubble]], as a result of  which  the construction sector crashed, and the banking sector suffered a downturn despite the fact that it  had avoided the acquisition of [[toxic debt]]. Another major factor was [[deleveraging]] of a deeply indebted household sector. The Government responded with a major [[fiscal stimulus]] that, together with the effects of the country's [[automatic stabilisers]] resulted in the largest [[budget deficit]] in the European Union - although its [[public debt]] as a percentage of GDP was among the smallest. In 2010, the bond market developed a [[debt aversion]] against Spain following the [[Great Recession/Addendum#Greece|Greek crisis]], the Standard and Poor [[credit rating agency]] downgraded its  credit rating from AA+ to AA on 28 April 2010<ref>[http://ftalphaville.ft.com/blog/2010/04/28/214791/sp-downgrades-spain-to-aa/ ''S&P downgrades Spain to AA'', Financial Times Alphaville 28 April 2010]</ref>. A [[spread]] of Spanish government bonds over German government bonds developed in the course of 2010 and had  risen to over 3½ per cent by mid-2011.


===Asia===
====Portugal====
 
[http://news.bbc.co.uk/1/hi/world/europe/country_profiles/994099.stm Country profile]  [http://www.imf.org/external/pubs/ft/scr/2012/cr12292.pdf  IMF Country Report, October 2012]


====Japan====
[[Eurozone crisis/Addendum#Portugal|Portugal in the eurozone crisis]]
::::{|class = "wikitable"   
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 740: Line 1,126:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)<ref name=EEF/>
|align="center"| 2.4
|align="center"| 0.0
|align="center"| -2.5
|align="center"| 1.4
|align="center"| -1.8
|align="center"| 1.1
|align="center"| 0.2
|align="center"| 0.3
|align="center"| -0.6
|align="center"| -0.6
|align="center"| 0.0
|align="center"| -0.6
|align="center"| -0.6
|align="center"| -5.3
|align="center"| -1.4
|align="center"| -3.6
|align="center"| 1.5
|align="center"| -0.1
|align="center"| -0.1
|align="center"| 0.9
|align="center"| -1.0
|align="center"|
|align="center"| -0.9
|align="center"|  
|align="center"| -1.8
|align="center"|  
 
|align="center"|
|-
|-
| Unemployment(% of labour force)<ref name=u/>
| Unemployment (% of labour force
|align="center"|  
|align="center"| 8.5
|align="center"|  
|align="center"| 10.6
|align="center"|  
|align="center"| 12.0
|align="center"|  
|align="center"| 12.6
|align="center"| 10.5
|align="center"| 11.1
|align="center"| 11.1
|align="center"| 12.3
|align="center"| 12.4
|align="center"| 12.6
|align="center"| 12.7
|align="center"| 14.1
|align="center"| 14.8
|align="center"| 15.3
|align="center"| 15.9
|align="center"|  
|align="center"|  
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|align="center"|
|-
|-
|
| Consumer prices (% increase on the same period of the previous year)<ref name=cp/>
|align="center"| 2.7
|align="center"| -0.0
|align="center"| 1.4
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"| 0.3
|align="center"|  
|align="center"| 1.0
|align="center"|  
|align="center"| 1.9
|align="center"|  
|align="center"| 2.2
|align="center"|  
|align="center"| 3.7
|align="center"|
|align="center"| 3.7
|align="center"|  
|align="center"| 3.2
|align="center"|  
|align="center"| 3.9
|align="center"|
|align="center"| 
|}
|}
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>.
The Portuguese economy has long depended upon agricultural exports, tourism, and income from its nationals working abroad - all three of which were hit by the recession. It went into downturn earlier than the European average and emerged no sooner. The Government responded with a [[fiscal stimulus]] equivalent to about 1¼ per cent of GDP.
According to its statistics institute, the Portuguese economy grew by 0.3 per cent in the second quarter of 2009 after contracting in the previous three quarters, leaving it at 3.7 per cent lower than a year previously.  The ensuing growth rate has been low  and by the 2nd quarter of 2011, real gdp per person was 3 percent below its level in the 4th quarter of 2007<ref name="rec"/>and the  unemployment rate has remained above 10 per cent. The IMF expects GDP growth to resume in 2012, following a 2.2 per cent contraction 2011<ref>[http://www.imf.org/external/np/sec/pr/2011/pr11307.htm ''Statement by the EC, ECB, and IMF on the First Review Mission to Portugal'', IMF Press Release No. 11/307, August 12, 2011]</ref>.
 
Portugal's  [[public debt]] reached 77 per cent of GDP in 2009 and was expected to expand further in 2010. <ref>[http://www.imf.org/external/pubs/ft/scr/2010/cr1018.pdf ''Country Report on Portugal'', International Monetary Fund, January 2010]</ref>. [[Deficit]]-reducing measures were put in hand and were  met with strong trade union resistance. Unease following downgrades of Greek government bonds caused increasing [[debt aversion]] towards Portugal, and  Standard and Poor downgraded its credit rating from A+ to A- (4 grades below the top) on 27th April 2010<ref>[http://ftalphaville.ft.com/blog/2010/04/27/213326/sp-cuts-portugals-ratings-two-notches-to-a/  ''S&P cuts Portugal’s ratings two notches to A-''  , Financial Times Alphaville 27 April 2010]</ref>.  On 12th January 2011 a  €599m  issue of  bonds  maturing  in 2020 at a yield of 6.716 per cent was oversubscribed<ref>[http://www.ft.com/cms/s/0/48f3d536-1e9e-11e0-a1d1-00144feab49a.html#axzz1AZtddOu0 Dave Shellock ''Portuguese bond sale boosts confidence'', Financial Times, January 12 2011]</ref>, but 6th April the Prime Minister announced that he had applied fr financial assistance from the European Union <ref>[http://www.reuters.com/article/2011/04/06/portugal-socrates-aid-idUSLIS00263120110406 ''Portugal PM Socrates says requests EU aid'', Reuters 6 April 2011]</ref>.
 
The [[spread]] of Portugese government bonds over German governmeny bonds had reached 8 percent by August 2011.
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>
 
===Asia===
 
====Japan====


====China====
[http://www.imf.org/external/pubs/ft/scr/2012/cr12208.pdf IMF country report, August 2012]
::::{|class = "wikitable"   
{|class = "wikitable"   


!  
!  
!colspan = "3"|
!colspan = "4"|
!colspan = "4"|2009
!colspan = "4"|2009
!colspan = "4"|2010
!colspan = "4"|2010
!colspan = "4"|2011
!colspan = "4"|2012
|-
|-
!  
!  
!align="center"| 2007
!align="center"| 2008  
!align="center"| 2008  
!align="center"| 2009
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011


!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q3&nbsp;
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q1&nbsp;
!align="center"| &nbsp; Q2&nbsp;
!align="center"| &nbsp; Q2&nbsp;
Line 803: Line 1,225:
!align="center"| &nbsp; Q4&nbsp;
!align="center"| &nbsp; Q4&nbsp;
|-
|-
| GDP (% change on previous period)<ref name=OECD/>
| GDP (% change on previous period)
|align="center"| -1.2
|align="center"| -5.2
|align="center"| 3.5
|align="center"| 1.3
|align="center"| -4.2
|align="center"| 1.7
|align="center"| 0.1
|align="center"|  
|align="center"|  
|align="center"| 1.5
|align="center"| 1.3
|align="center"| 0.6
|align="center"| -0.2
|align="center"| -1.8
|align="center"| -0.3
|align="center"| 1.8
|align="center"| 0.1
|align="center"| 1.3
|align="center"| 0.1
|align="center"| -0.9
|align="center"|
|-
| Unemployment (% of labour force)
|align="center"| 4.0
|align="center"| 5.1
|align="center"| 5.1
|align="center"| 4.9
|align="center"| 4.3
|align="center"| 5.1
|align="center"| 5.4
|align="center"| 5.7
|align="center"| 4.9
|align="center"| 5.2
|align="center"| 5.1
|align="center"| 5.7
|align="center"| 4.8
|align="center"| 4.6
|align="center"| 4.4
|align="center"| 4.5
|align="center"| 4.5
|align="center"| 4.4
|align="center"| 4.2
|align="center"|
|-
| Consumer prices (% increase on the same period of the previous year)<ref name=p/>
|align="center"| 1.4
|align="center"| -1.4
|align="center"| -0.9
|align="center"| -0,7
|align="center"| -0.1
|align="center"| -1.1
|align="center"| -2.2
|align="center"| -2.0
|align="center"| -1.2
|align="center"| -0.9
|align="center"| -0.8
|align="center"| 0.1 
|}
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>. By the second quarter of 2011 real gdp per person was 5 percent below its level in the 4th quarter of 2007 and 8 per cent below its 1997-2007 trend line<ref name="depth"/>.
The government introduced [[fiscal stimulus]] measures amounting to 2 per cent of GDP . Combined with the effect of the country's [[automatic stabilisers]], its  [[national debt]] (the majority of which was held by domestic investors) is expected to rise to over 200 per cent of GDP from its already massive pre-crisis level of 167 per cent<ref name=debt/>.
Japan entered the recession in 2007 with a [[national debt]] of 188 per cent of its GDP which is projected to rise to 246  percent by 2014<ref name=debt/>. About 95 per cent of the national debt is held by domestic investors. In 2008, the country's total debt was 459 per cent of GDP (made up of government debt 188 per cent, household debt 96 per cent and business debt 175 per cent)<ref name = McKinsey/>
On 27 January 2011, Standard and Poor's downgraded Japan's long-term sovereign credit ratings to 'AA-' from
'AA'.long-term sovereign credit ratings to 'AA-' from 'AA<ref>[http://www.standardandpoors.com/prot/ratings/articles/en/eu/?assetID=1245286301728http://www.standardandpoors.com/prot/ratings/articles/en/eu/?assetID=1245286301728. ''Ratings On Japan Lowered To 'AA-'; Outlook StableRatings On Japan Lowered To 'AA-'; Outlook Stable'', s&P 27/01/2011]</ref>
On March 11 2011 a major  earthquake and tsunami struck Japan. About 450 thousand people were made homeless, and more than 20,000 may have died. As a  result,  Japan's GDP is estimated to have been reduced  by  between 3 and 5 percent.
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>
====China====
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
!colspan="5"| GDP growth (%),<ref name=world/>
|-
!align="center"| 2007
!align="center"| 2008
!align="center"| 2009
!align="center"| 2010
!align="center"| 2011
|-
|align="center"| 14.2
|align="center"| 9.6
|align="center"| 9.6
|align="center"| 8.7
|align="center"| 9.1
|align="center"|  
|align="center"| 10.3
|align="center"|  
!align="center"| 9.3
|align="center"|
|}
|align="center"|
In November 2008, the Chinese Government announced a major [[fiscal stimulus]] (amounting to 4.4 per cent of  GDP)  and the adoption of a highly expansionary [[monetary policy]], which  partially  offset  the effect of the collapse in world trade upon China's export sales, and limited the resulting fall in output growth. Export growth resumed in the course of 2009 - rising to above pre-crisis levels in 2010. Output growth began to pick up in the second quarter of 2009 and continued into 2010, supported by an expansionary fiscal stance<ref>[http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/CHINAEXTN/0,,contentMDK:22617700~pagePK:141137~piPK:141127~theSitePK:318950,00.html ''China Quartery Update'', World Bank, June 2010]</ref>, and there were signs of a developing property boom<ref>[http://siteresources.worldbank.org/CHINAEXTN/Resources/318949-1268688634523/CQU_march2010.pdf  ''China Quarterly Update'', World Bank, March 2010]</ref>.
|align="center"|
 
|align="center"|
====India====
|align="center"|
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
|align="center"|  
!colspan="5"| GDP growth (%) <ref name=world/>
|-
|-
| Unemployment(% of labour force)<ref name=u/>
!align="center"| 2007
|align="center"|
!align="center"| 2008
|align="center"|
!align="center"| 2009
|align="center"|
!align="center"| 2010
|align="center"|
!align="center"| 2011
|align="center"|
|align="center"|
|align="center"|
|align="center"|  
|align="center"|  
|align="center"|  
|align="center"|
|-
|-
|align="center"| 9.0
|align="center"|
|align="center"| 6.7
|align="center"|
|align="center"| 9.1
|align="center"|  
|align="center"| 8.8
|align="center"|  
!align="center"| 8.0
|align="center"|  
|align="center"|  
|align="center"|
|align="center"|
|align="center"|
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A reversal of India's capital inflows started in January 2008 through a massive disinvestment by foreign institutional investors  (a  net  disinvestment of $13.3 billion from January 2008 to February 2009 following  a net investment of $17.7 billion during 2007).
That was followed by a massive slowdown in external commercial borrowing by India’s companies, trade credit and banking inflows from April 2008
<ref> Working Paper No. 241  Mathew Joseph, Karan Singh, Pankaj Vashisht Dony Alex, Alamuru Soumya, Ritika Tewari, and Ritwik Banerjee: ''The State of the Indian Economy 2009-10'', Indian Council for Research on International Relations, October 2009[http://www.icrier.org/publication/Workingpaper241.pdf]</ref>. There was a progressive reduction in manufacturing output in the course of 2009 following a fall in overseas demand for India's exports<ref>[http://indiabudget.nic.in/es2008-09/chapt2009/chap12.pdf ''Economic Survey 2008-09'', Ministry of Finance, Government of India, January 2010]</ref>. Output growth resumed in March 2009, was back on trend by June and is expected to continue at its long-term trend rate through 2010 and beyond<ref>[http://www.imf.org/external/pubs/ft/scr/2010/cr1073.pdf ''Country Report: India'', March 2010]</ref>. By the second quarter of 2011 real gdp per person was 22 percent above its level in the 4th quarter of 2007<ref name="depth"/>.
<small>
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>
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====Australia====
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|align="center"| 4.4
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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%


.
The government introduced [[fiscal stimulus]] measures amounting to 4.6 per cent of GDP spread over the three years 2008-10.
In  the course of 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%
 
===Africa===
====South Africa====
{|class = "wikitable" align="right" cellpadding="10" style="width:20%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
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|-
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The South African economy was growing strongly in 2006 but, in response to the inflationary threat from growing food prices, the Government then adopted a programme of monetary restraint. Economic growth was already slowing when the economy was hit by the financial crisis of late 2008. There was a sudden outflow of international funds,  exports fell in response to the falls in international trade and in commodity prices, and the economy went into recession. Output fell by 1.8 percent  in the fourth quarter of 2008 and by a further 6.4 percent in the first quarter of 2009. Manufacturing and mining output  contracted dramatically, and the unemployment rate rose to 23 per cent. <ref>[http://www.imf.org/external/pubs/ft/scr/2009/cr09273.pdf ''Country Report: South Africa'', International Monetary Fund, September 2009]</ref>
 
===Other developing countries ===
The other sub-Sahara African countries were largely unaffected by the recession with  the economies of all except Eritrea estimated to have grown by more than 4 per cent between 2009 and 2010<ref> Economist October 30th 2010, page 114</ref>.
Most of the developing countries experienced a slowdown in economic growth, however.  The worst affected were in Latin America and the Caribbean,  and in Europe and Central Asia; and none of the other developing countries  suffered an actual fall in output. There was  weak recovery of output in the course of 2009, but there were still [[output gap]]s of around 3 per cent of GDP at the end of 2009, suggesting that high levels of unemployment might continue. perhaps for years  <ref name=WBdev/>. Experience varied among the developing countries, however. Economists at the International Monetary Fund found that the worst affected of the developing  countries had been those with highly [[leverage|leveraged]] domestic financial systems and rapid credit growth. Countries  exporting more advanced manufacturing goods had suffered more than  those exporting food,  and  countries with pegged exchange rates had  fared less well than those with flexible exchange rates<ref>[http://www.imf.org/external/pubs/ft/wp/2009/wp09280.pdf Pelin Berkmen, Gaston Gelos, Robert Rennhack, and James P. Walsh: ''The Global Financial Crisis: Explaining Cross-Country Differences in the Output Impact'', IMF Working Paper no WP/09/280, December 2009]</ref>.


===Developing countries===
<small>
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>.
[[Great Recession/Addendum#The World|'''RETURN TO TOP''']]
</small>


==References==
==References==
{{Reflist|2}}
{{Reflist|2}}

Latest revision as of 09:21, 26 August 2024

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This addendum is a continuation of the article Great Recession.

International recession and recovery by region

The World

GDP growth (%)([1])
2007 2008 2009 2010 2011
5.2 1.7 -2.2 3.8 3.2
Trade growth (vol%) ([1])
2007 2008  2009  2010 2011
7.2 3.2 -11.0 11.5 8.0

The financial crisis had an adverse effect upon most of the world's economies. Those worst affected include the high income countries (The United States, Canada, Europe and Japan) with a collective GDP reduction in 2009 of 3.3 per cent. Output reductions between the peak in 2008 and the trough in 2009 were approximately 4 per cent of GDP in the United States, 6 percent in the United Kingdom, 6½ per cent in Italy, 7 per cent in Germany and 8½ per cent in Japan[2]. Next in severity were the downturns of the developing economies (excluding China and India) with a collective GDP reduction of 2.2 per cent[1] The recession had little effect on the South Asian economies, and a comparatively small effect on the East Asian economies. Its impact on the economies of China and India took the form only of significant growth rate reductions.

The advanced G20 countries entered the recession in 2007 with a public debt averaging 78 per cent of GDP (United Kingdom 44 per cent, United States 62, Germany 63, France 64, Italy 104, Japan 188), which is projected to rise to 118 per cent by 2014 (Germany 89 per cent , France 96, United Kingdom 98, United States 108, Italy 129, Japan 246 )[3]

Economic growth returned to most countries in the course of 2009 at or above pre-recession levels in most developing countries, but below pre-recession rates in many industrialised countries.

America

The United States

2009 2010 2011
2008 2009 2010   Q1      Q2     Q3     Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous quarter at an annual rate) [4] 0.0 -2.7 2.9 -6.7 -0.7 1.7 3.8 3.9 3.8 2.3 2.3 0.4 1.3 1.8 2.8
Unemployment (% of labour force)[5] 5.8 9.3 9.6 8.2 9.3 9.7 10.0 9.7 9.6 9.7 9.6 8.9 9.1 9.1 8.7
Consumer prices (% increase on the same period of the previous year)[6] 3.8 -0.4 1.6 0.2 -1.3 -1.6 1.4 2.4 1.8 1.2 1.3 2.1 3.4 3.8 3.4

The growth rate of American economy slowed sharply from around 3 per cent in 2006 to 2 per cent in 2007 and the economy continued to operate at below its trend rate of growth until the fourth quarter of 2009. Following the bursting of the house price bubble and the development of the subprime mortgage crisis in 2007, two and a half million families faced foreclosure in 2008, and the reductions in personal wealth resulting from the fall in house prices were causing further reductions in demand. The financial crash of 2008, and the resulting credit crunch, caused further declines in business activity, which added more pressure on the financial system and three and a half million Americans lost their jobs in the course of 2008[7]. Credit remained tight in 2009 with lenders imposing strict standards for all types of loans [8] and unemployment continued to rise throughout the year. By the second quarter of 2011 real GDP per person was 4 percent below its level in the 4th quarter of 2007 and 10 per cent below its 1997-2007 trend line[9]

The Federal Reserve Bank introduced a range of emergency measures, including discount rate reductions and credit easing that resulted in an increase in the monetary base of approximately 140 per cent over its pre-crisis level by the end of 2009 [10], and the government introduced a fiscal stimulus package that is estimated to total 4.8 per cent of GDP [11]. The Federal budget deficit rose sharply under the operation of the economy's automatic stabilisers, and by 2010 the public debt had risen from its 2007 level of 62 percent of GDP to over 90 per cent[3] which is projected to rise to 108 percent by 2014[3]. The country's total debt in 2008 was 290 per cent of GDP (made up of government debt 60 per cent, household debt 78 per cent and business debt 152 per cent) [12]. On August 10 2010, after a contentious debate, the Federal Reserve Board decided to maintain its $2.05 trillion stock of mortgage debt and U.S. Treasury holdings, in view of fears of a second downturn[13].

On August 1 2011 the Congress agreed to raise the federal debt ceiling by up to $2.4tn and make budget savings worth a similar amount over 10 years[14].

The Congressional Budget Office estimate that effect of a broadly similar "illustrative policy" would be to decrease output in 2012, 2013, and 2014 by amounts ranging from roughly 0.1 percent to 0.6 percent. Beyond 2014, the policy would lead to gains in GNP amounting the years from 2019 through 2021, by roughly 0.5 percent to 1.4 percent[15]. An IMF comment took the view that "the planned spending cuts are appropriately phased and not overly frontloaded so as not to undermine growth"[16].

The World Bank's January 2012 forecast shows a GDP growth rate of 2.2 per cent for 2012 (table).


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Canada

The Canadian mortgage market did not experience the surge in defaults that triggered the subprime mortgage crisis in the United States, and the subsequent financial crash of 2008 had little effect upon the Canadian financial system. Events in the United States nevertheless affected the rest of the Canadian economy. The economic growth rate faltered in the Autumn of 2007 as exports fell in response to falling demand from the United States, and the downturn developed into a sharp contraction, led by falling investment and household spending, in the last quarter of 2008. The government introduced fiscal stimulus measures amounting to 4 per cent of GDP spread over the three years 2008-10, and a modest recovery started in the second half of 2009. By the second quarter of 2011 real GDP per person was 1 percent below its level in the 4th quarter of 2007 and 9 per cent below its 1997-2007 trend line[9].

Central and Southern America

GDP growth (%)[1]
2007 2008 2009 2010 2011
Mexico 3.3 1.4 -6.1 5.5 4.4
Brazil 5.7 5.1 -0.7 7.5 4.2
Argentina 8.7 6.8 0.9 9.2 6.3

The Mexican economy suffered from a sharp fall in Mexican workers' remittances from abroad[17] and from the fall in the price of oil. In Brazil, GDP fell by 0.2 percent year-on-year in the first two quarters of the crisis period, but rebounded in the second and third quarter of 2009. In Argentina, GDP increased by 0.5 and 0.2 percent on an annualized basis in the second and third quarters of 2009[18].





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Europe

The European Union

2007 2008 2009 2010 2011 2012
GDP growth(%)[19] 3.2 0.3 -4.2 2.0 1.5 -0.3
Unemployment rate (%))[19] 7.2 7.1 9.0 9.7 9.7
Consumer price change (%))[19] 2.4 3.7 1.0 2.1 3.0

The European economy emerged from a deep recession during 2009 and most national economies have since experienced continuous below-trend growth. However the Polish economy escaped the recession, the Greek economy has remained in recession, the Portuguese economy has suffered a downturn, and the economies of Latvia, Romania, Bulgaria and Ireland are experiencing no more than a hesitant recovery. Unemployment rates in mid-2011 ranged from 4 to 5 per cent in the Netherlands and Austria to over 20 per cent in Spain and the Baltic States.

The Eurozone

2007 2008 2009 2010 2011 2012
GDP (% change on previous year)[19] 3.0 0.4 -4.2 1.9 1.4 -0.4
Unemployment (% of labour force)[19] 7.6 7.6 9.5 10.1 10.0
HICP consumer price index (% change on previous year)[19] 2.1 3.3 0.3 1.6 2.6

As reported below, the recession had widely differing impacts upon the economies of members of the eurozone but all were subject to the monetary policy of the European Central Bank. In 2008/2009, the bank responded to the recession by reducing its discount rate in stages to a minimum of 1 per cent, and adopting a limited amount of quantitative easing, a policy that resulted in an increase in the monetary base of approximately 50 per cent over its pre-crisis level by the end of 2009[10]. The recession ended in the third quarter of 2009 with a modest (0.3% quarter-on-quarter) increase in real GDP, and continued throughout 2010 and 2011.

With the return of economic growth, attention turned to fiscal policy. The EU's growth and stability pact required member governments to limit their budget deficits to 3 per cent of GDP and their public debt to 60 per cent of GDP, but there had been numerous breaches.

PIIGS debt (% of GDP)
Portugal    Italy     Ireland   Greece   Spain  
End 2009[7] 77 116 64 115 53
End 2010[8] 93 119 96 143 60
End 2011[9] 108 121 106 171 69
10 year Sovereign spread over German bonds, per cent
Portugal    Italy     Ireland   Greece   Spain  
Q1 2010 ½ ½ ½
Q3 2011 8 8 12

Few member governments were in compliance with those limits by the end of 2009 [20]. Twelve member states had public debt ratios higher than 60% of GDP in 2009, including France (77.6%) and Germany.(60.9%)[21]. There was general agreement that priority should be given to the achievement of a rapid return to compliance with the agreed limits, and programmes of reductions in public expenditure and increases of taxation were put in hand. Concern nevertheless developed among bond market investors concerning the fiscal sustainability of some eurozone members. It became evident in early 2010 that, without external assistance, the Greek government would be forced to default on its debt, and in the course of 2010, investors' fears of sovereign default by other eurozone governments increased their cost of borrowing. Conditional loans to the governments of Greece, Ireland and Portugal, that were intended to give them time to bring about a return to fiscal sustainability, failed to reassure investors. In the latter half of 2011 it became evident that a default by the Greek government could no longer be avoided, and there were increases in the sovereign spreads of Spain and Italy that were attributed to contagion from Greece. In mid November there were increases in the bond yields of other eurozone countries including France, and on 24 November 2011 there was a partial failure of a German government bond auction. There were sharp falls in consumer and business confidence in the second half of 2011[22][23] and a general reduction in GDP growth rates. The World Bank's January 2012 forecast shows a GDP growth rate of 0.3 per cent for 2012 (table).

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The United Kingdom

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period) -0.1 -4.9 1.3 1.5 0.4 1.2 0.8 -0.5 0.5 -0.1 0.6 -0.4 -0.3 -0.4 1.0 -0.3
Unemployment (% of labour force)[10] 5.6 7.6 7.8 8.0 7.8 7.8 7.8 7.9 7.7 7.9 8.1 8.7 8.3 8.2 8.1
Consumer prices (% increase on the same period of the previous year)[24] 3.6 2.2 3.2 3.3 3.4 3.1 3.4 4.1 4.4 4.7 4.7

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[25] and to the development of a comparatively vigorous housing boom[26], 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 [27], 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 [28], 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 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. By the second quarter of 2011 real gdp per person was 6 percent below its level in the 4th quarter of 2007 and 13 per cent below its 1997-2007 trend line[9]. The Bank of England introduced a range of emergency measures including discount rate reductions and quantitative easing that resulted in an increase in the monetary base of approximately 230 per cent over its pre-crisis level by the end of 2009 [10] A fiscal stimulus amounting to 1.5 per cent of GDP was introduced by the November Pre-Budget Report, including a temporary 2.5 percentage point reduction in value-added tax and a bringing forward of £3 billion of capital investment.

The United Kingdom entered the recession in 2007 with a public debt of 44 per cent of its GDP, which had risen to 62 per cent by 2010, about 30 per cent of which was held by overseas investors. In February 2010 its Parliament passed the Fiscal Responsibility Act[29] which imposed a duty on the Treasury to ensure that by the financial year ending 2014 public sector net borrowing as a percentage of GDP is at least halved from its level for the financial year ending 2010.

Following the replacement of the Labour government in 2010 by a Conservative/Liberal Democrat coalition government, the budget of June 2010 introduced proposals that were targeted to achieve that halving two years sooner[30] and to result in a fall in national debt as a share of national income between 2014–15 and 2015–16. An analysis by economists of the Institute of Fiscal Studies suggests that neither target will be met [31]. In the June 2010 budget forecast, GDP was expected to rise by 2.8 per cent in 2012. That forecast was revised to 0.8 per cent in March 2012, and by November 2012, the average of independent forecasts was for a slight reduction in GDP in 2012, rising to 2 per cent by 2015.


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Germany

IMF country report July 2012

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] 1.1 -5.1 3.7 2.9 0.6 2.2 0.7 0.6 1.2 0.5 0.4 -0.1 0.5 0.3 0.2 -0.6
Unemployment (% of labour force) [11] 7.5 7.8 7.1 6.0 7.3 7.0 6.7 6.7 6.3 6.0 5.8 5.7 5.5 5.5 5.5
Consumer prices (% increase on the same period of the previous year)[24] 2.8 0.2 1.1 0.8 1.1 1.2 1.5 2.1 2.3 2.5 2.3

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. By the second quarter of 2011 real gdp per person was 2 percent above its level in the 4th quarter of 2007 but 3 per cent below its 1997-2007 trend line[9].


The government introduced a fiscal stimulus package that is estimated to total 3.4 per cent of GDP[11] 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 and raise the national debt from its 2007 level of 65 per cent of GDP to over 80 per cent by 2010[3]. The recovery in the second half of 2009 has been attributed by the OECD to the fiscal stimulus, expansionary monetary conditions, an upswing in world trade and restocking activities of companies[32] but in view of the substantial output gap that remained at the end of 2009 they estimate that the pre-crisis level of production will not be reached until 2013.

Germany entered the recession in 2007 with a national debt of 63 per cent of its GDP which is projected to rise to 101 percent by 2014[3]. In 2008, the country's total debt was 274 per cent of GDP (made up of government debt 69 per cent, household debt 66 per cent and business debt 138 per cent)[12]

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France

IMF country report, July 2011

France in the eurozone crisis

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] -0.1 -2.7 1.5 1.6 0.2 0.7 0.4 0.6 0.9 0.0 0.3 0.0 0.0 -0.1 0.1 -0.3
Unemployment (% of labour force) 7.8 9.5 9.8 9.8 9.9 9.9 9.7 9.8 9.6 9.6 9.7 9.8 10.0 10.3 10.6
Consumer prices (% increase on the same period of the previous year)[24] 0.7 1.7 1.6 1.3 1.6 1.5 1.8 1.8 2.1 2.1 2.4

The French economy suffered less from the recession than those of most of the other G7 countries. French banks were affected less than their counterparts in many other countries, primarily because they had diversified their activities and adopted more ,defensive prudential lending standards, and household indebtedness remained lower than in other countries. The measures taken by the government in October 2008 to boost the liquidity and solvency of the big banks were successsful in maintainng the functioning of the credit market [33]. By the second quarter of 2011 real gdp per person was 2 percent below its level in the 4th quarter of 2007 and 8 per cent below its 1997-2007 trend line[9].


The government introduced a fiscal stimulus package that is estimated to total 1.3 per cent of GDP [11] 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.

France entered the recession in 2007 with a national debt of 64 per cent of its GDP which is projected to rise to 96 percent by 2014[3]. In 2008, the country's total debt was 308 per cent of GDP (made up of government debt 73 per cent, household debt 110 per cent and business debt 125 per cent)[12]

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Italy

IMF country report, July 2012

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] -1.2 -5.1 1.5 0.5 0.4 0.5 0.2 0.1 0.1 0.3 -0.1 -0.7 -0.8 -0.7 -0.2 -0.9
Unemployment (% of labour force) 6.7 7.8 8.4 8.1 8.4 8.5 8.2 8.3 8.2 8.2 8.5 9.2 10.0 10.6 10.7
Consumer prices (% increase on the same period of the previous year)[24] 3.5 0.8 1.4 1.3 1.4 1.6 1.8 2.3 2,7 2.8 3.3

Italian banks were less exposed to high-risk products than those of other large countries because of their conservative behaviour and their regulators' and supervisory caution, and there were no bank closures or rescues. [34]. The economy nevertheless suffered a relatively severe recession. By the second quarter of 2011 real gdp per person was 6 percent below its level in the 4th quarter of 2007 and 9 per cent below its 1997-2007 trend line[9].

Italy entered the recession in 2007 with a national debt of 104 per cent of its GDP which is projected to rise to 129 percent by 2014[3]. In 2008, the country's total debt was 298 per cent of GDP (made up of government debt 117 per cent, household debt 81 per cent and business debt 303 per cent)[12]

A spread of Italian government bonds over German government bonds developed in the course of 2010 and rose to over 3½ per cent by August 2011.


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Iceland

2009 2010
2007 2008 2009   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period) 5.6 1.7 -7.0 -0.6 -2.7 -5.4 -0.3 -1,2 -3.1 1.2 -1.6
Unemployment (% of labour force) 2.3 3.0 7.2 7.2 6.9 7.3 7.7 7.3 6.8 7.2 6.7
Consumer prices (percent increase on the same period of the previous year) 5.1 12.7 17.1 11.9 11.1 8.6 7.4 7.1 4.4 2.8

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 [35], believed that its banking model was not viable). A few months later its banking system had collapsed[36], 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[37]. 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. In October 2009 an OECD economist reported that Iceland's economy was in the midst of a deep recession; the exchange rate had plunged; capital flows had been frozen; inflation was up; public debt had risen; social needs had increased; and that the unemployment insurance fund was been nearly depleted[38]. In November 2009 the Moodys credit rating agency downgraded Iceland's government bonds to its lowest investment grade. The government had introduced fiscal stimulus measures amounting to 9.4 per cent of GDP spread over the two years 2009-10, a loan was obtained from the International Monetary Fund and recovery was expected during 2011 [39].

In a June 2010 press release, the IMF effectively approved the Government's fiscal policy with the statement that "the planned 3 percent of GDP fiscal adjustment can deliver a primary surplus and a reduction in Iceland’s public debt, provided budget implementation stays on track in 2010"[40].

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Ireland

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] -3.0 -7.0 -0.4 1.1 2.2 -1.2 0.5 -1.4 1.9 1.6 -0.5 0.6 -0.7 0.0
Unemployment (% of labour force) 6.3 11.9 13.7 14.4 12.8 13.1 13.7 14.4 14.2 14.2 14.7 14.7 14.8 14.7 15.0
Consumer prices (percent increase on the same period of the previous year)[24] 3.1 1.7 -1.5 -3.4 -1.4 0.2 0.9 2.3 2.8 2.5 2.8

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[41][42]. In an attempt to restore confidence, the Irish government undertook to guarantee loans to the banks. 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 inflation rate fell to -3 per cent in September 2009. By the 2nd quarter of 2010, GDP per person was 12 per cent below its level in the 4th quarter or 2007[43]

The government introduced fiscal stimulus measures amounting to 4.4 per cent of GDP spread over the three years 2008-10 which, combined with the effects of its automatic stabilisers is expected to raise the national debt to over 80 per cent of GDP from its 2007 level of 28 per cent[3]. Foreign investors became wary of the possibility 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 credit rating agency downgraded its rating for Ireland from AAA to AA+[44], 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 [45]. 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.[46][47].

The report of an IMF consultation published in July 2010 concluded that the governments "aggressive measures" had helped gain policy credibility and stabilize the economy but that further long-haul efforts with active risk management would be need to preserve policy credibility[48]. On August 24, 2010 the Standard and Poor's credit rating agency downgraded Ireland's debt for the 3rd time to AA- (following 3 downgrades by the Fitch agency and 2 by Moody's).

Ireland's economy suffered a second downturn in the second quarter of 2010 and the Government's financial position continued to deteriorate. In September 2010, its CDS spread reached a record 5 per cent. On the 22nd of November 2010 the government applied for financial assistance from the EU and the IMF[49] and on the 28th of Nonember, the Government announced the terms of the loan[50].

The National Recovery Plan of December 2010 aimed to consolidate public finances by 3.8% of GDP in 2011. Income tax bands werw to fall by 10%, and there were to be reductions in both current and capital expenditure.

The spread of Irish government bonds over German bonds had reached 8 percent by August 2011.

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Russia

GDP growth (%)[1]
2007 2008 2009 2010 2011
8.1 5.6 -7.8 4.0 4.4

A fall in the oil price combined with the collapse in world trade and a withdrawal of international credit had a devastating effect upon the Russian economy in the first half of 2009, and its GDP fell by about 10 percent [51]. That 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[12]. The budget balance changed from a surplus of 4¼ per cent of GDP in 2008 to a deficit of 6¼ per cent in 2009 which the Government monetised from reserves, leaving its public debt at the internationally low level of 11 per cent of GDP [52][53].

Russia's recession ended in the first quarter of 2010 with a GDP growth at a yearly rate of 3.3 per cent, followed in the second quarter by growth at a yearly rate of 5.2 per cent. By the 2nd quarter of 2011, real gdp per person was 2 percent above its level in the 4th quarter of 2007[43]

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The Baltic States

GDP growth (%)
2007 2008  2009  2010e
Estonia 7.2 -3.6 -14.7 -1.5
Lithuania 9.8 2.8 -14.8 3.3
Latvia 10.0 -4.6 -18.0 -4.0


The fastest-growing economies in the European Union in 2006 became its three fastest-contracting economies in 2009. Years of boom were followed by falls in GDP averaging about 1½ per cent in 2008 and about 16 per cent in 2009. An International Monetary Fund report on Estonia noted that investment already started to slow in mid-2007, along with a bursting of the property bubble, when the two main banks tightened lending conditions. The collapse of global external financing and foreign trade in the Lehman Brothers bankruptcy aftermath exacerbated the downturn. Deflation and wage declines were projected to persist through 2010 [54], but growth rates are expected to average between 2 and 5 per cent over the period 2010-14[55] [56].

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Greece

2010 2011 2012
2008 2009 2010 2011-   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] -0.2 -3.2 -3.5 -5.5 -0.6 -1.7 -1.6 -2.1 0.2 -2.7 -0.7 -0.7
Unemployment (% of labour force) 7.7 9.5 12.5 16.6 10.2 11.0 12.9 14.1 15.1 18.7 18.4 20.5 21.7 23.5
Consumer prices (% change on the same period of the preceding year)[24] 4.2 1.3 4.6 3.0 5.2 5.5 5.1 4.7 3.5 2.4 2.8

When Greece joined the Eurozone in 2001, it was less prosperous than the other members[57], but its GDP grew more rapidly over the next seven years and fell less rapidly in the course of 2009. By the end of 2009, its unemployment rate had nevertheless risen in line with the European average and it was still suffering higher levels of poverty [58]. The economy remained in recession throughout 2010, and by the 2nd quarter of 2011, real gdp per person was 10 percent below its level in the 4th quarter of 2007[43]

By the end of 2009, Greece's national debt had risen by about 25 per cent above its pre-crisis level of 100 per cent of GDP[3]. Concern about the sustainability of the government's fiscal policy had led the credit rating agencies to downgrade the government's debt in January 2010, [59], and several times after that; and by early 2010 the cost of insuring against default by the Greek government rose after Moody’s Investors Service said the country’s economy was facing a “slow death” from deteriorating finances[60]. The investor panic continued until, in April 2010, it was announced that the IMF and the Eurozone were prepared to offer the government loans amounting in total to €110 billion over three years. [61] [62][63]. In return, the Government was required to carry out a programme of fiscal contraction that was expected to drive its economy into a deep recession. The loan failed to reassure investors, and the CDS spread on Greek bonds rose from 4.8 per cent in April to 10 pre cent in November. In July 2011, Eurozone leaders and the International Monetary Fund agreed to lend Greece a further 109bn euros ($155bn, £96.3bn)[64] Under the deal, private sector investors - that is, the banks and institutions that hold Greek bonds - are being asked to accept a 21% loss on the debt they hold.

Spain

Country profile IMF Country Report July 2012

Spain in the eurozone crisis

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] 0.9 -3.7 -0.1 0.7 0.1 0.3 0.0 0.2 0.4 0.2 0.0 -0.5 -0.4 -0.4 -0.3 -0.7
Unemployment (% of labour force)[19] 11.3 18.0 20.1 20.9 19.4 20.1 20.5 20.5 20.6 20.9 22.1 23.0 23.8 24.6 25.1
Consumer prices (% increase on the same period of the previous year)[6] 4.1 -0.2 1.7 1.1 1.6 1.0 2.4 3.7 3.7 3.2 2.8

The recession in Spain was shallower but more protracted than the European average, and the recovery, which started in the first quarter of 2010, has been described as "weak and fragile"[65]. By the 2nd quarter of 2011, real gdp per person was 5 percent below its level in the 4th quarter of 2007[43] Spain's unemployment rate was among the highest in Europe, reaching over 20 per cent in 2011. A major contributory factor was the bursting of a vigorous housing bubble, as a result of which the construction sector crashed, and the banking sector suffered a downturn despite the fact that it had avoided the acquisition of toxic debt. Another major factor was deleveraging of a deeply indebted household sector. The Government responded with a major fiscal stimulus that, together with the effects of the country's automatic stabilisers resulted in the largest budget deficit in the European Union - although its public debt as a percentage of GDP was among the smallest. In 2010, the bond market developed a debt aversion against Spain following the Greek crisis, the Standard and Poor credit rating agency downgraded its credit rating from AA+ to AA on 28 April 2010[66]. A spread of Spanish government bonds over German government bonds developed in the course of 2010 and had risen to over 3½ per cent by mid-2011.

Portugal

Country profile IMF Country Report, October 2012

Portugal in the eurozone crisis

2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period)[19] 0.0 -2.5 1.4 -1.8 1.1 0.2 0.3 -0.6 -0.6 0.0 -0.6 -1.4 -0.1 -1.0 -0.9 -1.8
Unemployment (% of labour force 8.5 10.6 12.0 12.6 10.5 11.1 11.1 12.3 12.4 12.6 12.7 14.1 14.8 15.3 15.9
Consumer prices (% increase on the same period of the previous year)[24] 2.7 -0.0 1.4 0.3 1.0 1.9 2.2 3.7 3.7 3.2 3.9

The Portuguese economy has long depended upon agricultural exports, tourism, and income from its nationals working abroad - all three of which were hit by the recession. It went into downturn earlier than the European average and emerged no sooner. The Government responded with a fiscal stimulus equivalent to about 1¼ per cent of GDP. According to its statistics institute, the Portuguese economy grew by 0.3 per cent in the second quarter of 2009 after contracting in the previous three quarters, leaving it at 3.7 per cent lower than a year previously. The ensuing growth rate has been low and by the 2nd quarter of 2011, real gdp per person was 3 percent below its level in the 4th quarter of 2007[43]and the unemployment rate has remained above 10 per cent. The IMF expects GDP growth to resume in 2012, following a 2.2 per cent contraction 2011[67].

Portugal's public debt reached 77 per cent of GDP in 2009 and was expected to expand further in 2010. [68]. Deficit-reducing measures were put in hand and were met with strong trade union resistance. Unease following downgrades of Greek government bonds caused increasing debt aversion towards Portugal, and Standard and Poor downgraded its credit rating from A+ to A- (4 grades below the top) on 27th April 2010[69]. On 12th January 2011 a €599m issue of bonds maturing in 2020 at a yield of 6.716 per cent was oversubscribed[70], but 6th April the Prime Minister announced that he had applied fr financial assistance from the European Union [71].

The spread of Portugese government bonds over German governmeny bonds had reached 8 percent by August 2011.

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Asia

Japan

IMF country report, August 2012

2009 2010 2011 2012
2008 2009 2010 2011   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period) -1.2 -5.2 3.5 1.3 -4.2 1.7 0.1 1.5 1.3 0.6 -0.2 -1.8 -0.3 1.8 0.1 1.3 0.1 -0.9
Unemployment (% of labour force) 4.0 5.1 5.1 4.9 4.3 5.1 5.4 5.7 4.9 5.2 5.1 5.7 4.8 4.6 4.4 4.5 4.5 4.4 4.2
Consumer prices (% increase on the same period of the previous year)[6] 1.4 -1.4 -0.9 -0,7 -0.1 -1.1 -2.2 -2.0 -1.2 -0.9 -0.8 0.1

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 [72]. By the second quarter of 2011 real gdp per person was 5 percent below its level in the 4th quarter of 2007 and 8 per cent below its 1997-2007 trend line[9]. The government introduced fiscal stimulus measures amounting to 2 per cent of GDP . Combined with the effect of the country's automatic stabilisers, its national debt (the majority of which was held by domestic investors) is expected to rise to over 200 per cent of GDP from its already massive pre-crisis level of 167 per cent[3].

Japan entered the recession in 2007 with a national debt of 188 per cent of its GDP which is projected to rise to 246 percent by 2014[3]. About 95 per cent of the national debt is held by domestic investors. In 2008, the country's total debt was 459 per cent of GDP (made up of government debt 188 per cent, household debt 96 per cent and business debt 175 per cent)[12]

On 27 January 2011, Standard and Poor's downgraded Japan's long-term sovereign credit ratings to 'AA-' from 'AA'.long-term sovereign credit ratings to 'AA-' from 'AA[73]

On March 11 2011 a major earthquake and tsunami struck Japan. About 450 thousand people were made homeless, and more than 20,000 may have died. As a result, Japan's GDP is estimated to have been reduced by between 3 and 5 percent.

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China

GDP growth (%),[1]
2007 2008 2009 2010 2011
14.2 9.6 9.1 10.3 9.3

In November 2008, the Chinese Government announced a major fiscal stimulus (amounting to 4.4 per cent of GDP) and the adoption of a highly expansionary monetary policy, which partially offset the effect of the collapse in world trade upon China's export sales, and limited the resulting fall in output growth. Export growth resumed in the course of 2009 - rising to above pre-crisis levels in 2010. Output growth began to pick up in the second quarter of 2009 and continued into 2010, supported by an expansionary fiscal stance[74], and there were signs of a developing property boom[75].

India

GDP growth (%) [1]
2007 2008 2009 2010 2011
9.0 6.7 9.1 8.8 8.0

A reversal of India's capital inflows started in January 2008 through a massive disinvestment by foreign institutional investors (a net disinvestment of $13.3 billion from January 2008 to February 2009 following a net investment of $17.7 billion during 2007). That was followed by a massive slowdown in external commercial borrowing by India’s companies, trade credit and banking inflows from April 2008 [76]. There was a progressive reduction in manufacturing output in the course of 2009 following a fall in overseas demand for India's exports[77]. Output growth resumed in March 2009, was back on trend by June and is expected to continue at its long-term trend rate through 2010 and beyond[78]. By the second quarter of 2011 real gdp per person was 22 percent above its level in the 4th quarter of 2007[9].

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Australia

2009 2010
2007 2008 2009   Q1    Q2    Q3    Q4    Q1    Q2    Q3    Q4 
GDP (% change on previous period) 4.2 2.3 0.8 0.8 0.7 0.3 1.0 0.5
Unemployment (% of labour force) 4.4 4.2 5.6 5.3 5.7 5.8 5.6

The government introduced fiscal stimulus measures amounting to 4.6 per cent of GDP spread over the three years 2008-10. In the course of 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%

Africa

South Africa

GDP growth (%)[13]
2007 2008 2009e 2010e
5.1 3.1 -2.1 1.9

The South African economy was growing strongly in 2006 but, in response to the inflationary threat from growing food prices, the Government then adopted a programme of monetary restraint. Economic growth was already slowing when the economy was hit by the financial crisis of late 2008. There was a sudden outflow of international funds, exports fell in response to the falls in international trade and in commodity prices, and the economy went into recession. Output fell by 1.8 percent in the fourth quarter of 2008 and by a further 6.4 percent in the first quarter of 2009. Manufacturing and mining output contracted dramatically, and the unemployment rate rose to 23 per cent. [79]

Other developing countries

The other sub-Sahara African countries were largely unaffected by the recession with the economies of all except Eritrea estimated to have grown by more than 4 per cent between 2009 and 2010[80]. Most of the developing countries experienced a slowdown in economic growth, however. The worst affected were in Latin America and the Caribbean, and in Europe and Central Asia; and none of the other developing countries suffered an actual fall in output. There was weak recovery of output in the course of 2009, but there were still output gaps of around 3 per cent of GDP at the end of 2009, suggesting that high levels of unemployment might continue. perhaps for years [18]. Experience varied among the developing countries, however. Economists at the International Monetary Fund found that the worst affected of the developing countries had been those with highly leveraged domestic financial systems and rapid credit growth. Countries exporting more advanced manufacturing goods had suffered more than those exporting food, and countries with pegged exchange rates had fared less well than those with flexible exchange rates[81].

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