Recession of 2009/Addendum
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Recent economic developments
2008 4th quarter
World
- G20 leaders agree on need for fiscal stimulus [1]
The United States
Europe except UK
- Eurozone output falls - Euro area and EU27 GDP falls by 1.5% [2].
- German output falls - GDP falls by 2.1%.
- French output falls - GDP falls by 1.2%.
The United Kingdom
- Output falls - gdp falls by 1.5% [3].
- National debt reaches 43.6% of GDP [6]
Asia
- Recession in Japan GDP fell 3.3% from Q3 to Q4 2008 [7].
- Australian economy shrinks 0.5% [8]
- Developing countries in recession GDP probably fell by an average annualised rate of around 15% in Hong Kong, Singapore, South Korea and Taiwan [9]
2009, 1st quarter
World
- G7 Finance Ministers endorse fiscal stimulus policy [10]
The United States
- Rising unemployment - 7.6% in January, 8.1% February.
- Record budget deficit - $1.2 trillion 2009 deficit forecast by the Congressional Budget Office [11]. (Government spending expected to rise to 23% of GDP [12])
- Major fiscal stimulus - proposed by President-elect Obama in his speech of 8 January [13][14]
- Congress approves stimulus package - American Recovery and Reinvestment Act(H.R. 1) - a $839 billion stimulus package [15]
- Financial Stability Plan - Government launches a plan intended to restore confidence in the financial system (including mandatory stress tests for major banks) and to provide financial assistance households and businesses[16]
- Fears of Trade War – America First Steel Act, Homeland Security Comm. approves bill requiring federal agencies to use U.S. steel for public works projects, (HR 5935) [17] [18]
- Money supply increase Federal Reserve to increase the size of its balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. [19]
Washington's digression Outrage over AIG bonuses threatens to derail Obama's rescue plans [20]
Europe excluding UK
- ECB Discount rate cut from 2.4% to 2% [21]
- French industrial production plunges at an annual rate of 13% in January.
- German output projected to fall by 2.5 percent in 2009[22].
- Eastern Europe's economic crisis [23]
- IMF's Hungary programme[24]
United Kingdom
- Quantitative easing authorised[25]
- Asset protection scheme[26]
- Discount rate cut - from 2% to 1.0% [27].
- IMF endorses UK policy IMF Deputy Managing Director says "There is no unique weakness in the UK economy, and we believe the measures taken ...will strengthen the economy over the medium term "[28].
Asia
- China's falling growth rate [29]
- Japan's exports halved - exports in January 2009 were 56% less than in January 2008 [30].
2009, 2nd quarter
World
- World economy to shrink - according to World Bank report [31]
- Developing countries lose exports [32].
- IMF lending resources to increase - US proposes tripling them [33]
United States
Europe except UK
United Kingdom
- Quantitative easing starts- Bank of England cuts its discount rate to 0.5% and announces £75 billion asset purchase under its Asset Purchase Scheme [34] . The beginning of its programme of quantitative easing [35].
Asia
- China faces a difficult year[36]
Forecasts
- Annual percentage growth in Gross Domestic Product
- (forecasts are shown in italics)
Date Source Country 2007 2008 2009 2010 2011 22 December 2008 World Bank [37] United States 2.0 1.4 -0.5 2.0 Japan 2.1 0.5 -0.1 1.5 Euro area 2.6 1.1 -0.6 1.6 China 12 9.4 7.5 8.5 Developing [1] 6.1 5.0 2.9 4.7 World 3.7 2.5 0.9 3.0 28 January 2009 International Monetary Fund [38] United States 2.0 1.1 -1.6 1.6 United Kingdom 3.0 0.7 -2.8 0.2 France 2.2 0.8 -1.9 0.7 Japan 2.4 -0.3 -2.6 0.6 China 13 9 6.7 8 World 5.2 3.4 0.5 3.0 7 March 2009 Economist Poll [39] United States -2.2 1.9 United Kingdom -2.6 0.5 France -1.7 0.7 Germany -2.5 0.8 Japan -3.2 0.8
- ↑ Developing countries except China and India.