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This report is available on www.wachovia.com/economics and on Bloomberg at WBEC
 Jay H. Bryson, Global Economist jay.bryson@wachovia.com 1-704-383-3518
Tim Quinlan, Economic Analysttim.quinlan@wachovia.com 1-704-374-4407 
S
PECIAL
C
OMMENTARY
 
February 12, 2009
 
Global Chartbook: February 2009
 
Global Chartbook: February 2009February 12, 2009
 
SPECIAL COMMENTARY
 ContentsWorld...............................................................................................................................................6Dollar Exchange Rates...................................................................................................................7
 
United States...................................................................................................................................8
 
Euro-zone........................................................................................................................................9
 
Germany........................................................................................................................................10
 
France............................................................................................................................................11
 
Italy................................................................................................................................................12
 
 Japan..............................................................................................................................................13
 
United Kingdom..........................................................................................................................14
 
Canada...........................................................................................................................................15
 
Australia........................................................................................................................................16
 
Norway..........................................................................................................................................17
 
Sweden..........................................................................................................................................18
 
Switzerland...................................................................................................................................19
 
Brazil..............................................................................................................................................20
 
China..............................................................................................................................................21
 
India...............................................................................................................................................22
 
Mexico...........................................................................................................................................23
 
Poland............................................................................................................................................24
 
Russia.............................................................................................................................................25
 
Singapore......................................................................................................................................26
 
South Africa..................................................................................................................................27
 
South Korea..................................................................................................................................28
 
Taiwan...........................................................................................................................................29
 
Turkey...........................................................................................................................................30
 
Energy Markets............................................................................................................................31
 
2
 
Global Chartbook: February 2009February 12, 2009
 
SPECIAL COMMENTARY
 3
Executive Summary
Global Economy is in Deepest Recession in Decades
The heady days of 2004-2007, when global GDP growth averaged about 5% perannum, seem like a distant memory now. Growth in most countries slowed in thefirst half of 2008 due in part to monetary tightening, the unprecedented rise in energyprices and dislocations in credit markets. However, global economic activity wentinto freefall in the fourth quarter of last year as credit markets froze up in the wake ofLehman Brothers’ failure. Industrial production in the OECD countries (i.e., thethirty most developed economies in the world) plunged 7.6% in November, thesharpest year-over-year contraction since records began in 1975.We forecast global GDP will decline 0.3% this year. Although our projection may notsound “bad,” global GDP has never contracted, at least not since the InternationalMonetary Fund (IMF) began calculating the series in 1970. Every G-7 economy is indeep recession at present, and growth in the developed world likely will remainnegative over the next few quarters. The emerging world is hardly immune to thesharp reduction in global trade that is underway. Although not every developingcountry will experience outright recession, growth in the developing world hasalready slowed sharply and further weakening seems very likely. Developingeconomies that had over-leveraged financial sectors – many countries in EasternEurope would fall into this category – will be especially hard hit. A number ofcountries, including Belarus, Hungary, Iceland, Latvia, Pakistan and Ukraine, havealready gone to the IMF with hat in hand. There probably will be more to follow.What will turn the situation around? For starters, governments have responded tothe crisis by announcing steps to shore up their financial systems. Although theglobal financial system is hardly back to “normal”, some segments of the creditmarkets are starting to function again. In addition, governments are attempting tostimulate their economies via expansionary macroeconomic policies. Significantlylower interest rates and fiscal stimulus should help to stabilize economic activitylater this year. The sharp decline in inflation in most countries over the past fewmonths should help to shore up consumer spending by supporting real income.Global growth should be stronger in 2010 than in 2009, but it will probably fall shortof its long-run average (3.7% per annum). Underlying all of our projections is ourassumption that policymakers will take the necessary steps to prevent the globalfinancial system from locking up again à la last autumn. If that assumption proves tobe overly optimistic, then global economic activity would contract even more thanour already grim outlook projects.The U.S. economy has been in recession since December 2007, and it likely willremain there until this autumn. Unlike the strong recoveries that followed the deeprecessions of 1973-75 and 1981-82, the upturn that we project will take root later thisyear probably will be relatively weak, at least initially. Growth in consumer spendingprobably will be very sluggish over the next few years as consumers repair batteredbalance sheets and raise abysmally low saving rates. We project U.S. real GDP willgrow about 1% in 2010, well below the 3% annual growth rate the economy averagedbetween 1992 and 2007.Deep recessions are underway as well in Canada, the Euro-zone and the UnitedKingdom. On a peak-to-trough basis, real GDP in these economies will probablycontract 2 to 4%, which are deep recessions by any measure. Some observers use the
Global economic activity went into freefall in the fourthquarter of 2008.Global GDP will probably contract in 2009, the first year of negative growth sincerecords began in 1970.olicy easing should help to stabilizeeconomies later thisyear.The eventual recoveryin the United Stateslikely will be verysluggish.
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swapnilpthote

Hey i like this article, find it very useful, could you please sent it to me? I would be really thankful to you. Thanks, Swapnil

reply06 / 08 / 2009
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