Monday, 17 August 2009

Global recession may be coming to an end

The global economy appears to be slowly returning to growth.

Today, Japan's Cabinet Office reported that the country's gross domestic product grew by 0.9 percent in the second quarter, its first quarter of positive growth after four consecutive quarters of decline. The economy had contracted by 3.1 percent in the first quarter.

Reports in the previous few weeks had shown that most of the other major developed economies continued to shrink in the second quarter but the pace of contraction moderated from that in the first quarter.

GDP shrank 0.1 percent in the euro area in the second quarter after contracting by 2.5 percent in the first quarter. Germany, the largest economy in Europe, even managed to expand by 0.3 percent in the first quarter. Although small, this was a sharp turnaround from the previous quarter's 3.5 percent contraction.

In the United States, GDP shrank 0.3 percent in the second quarter after contracting by 1.6 percent in the first quarter.

Apparently, the economies that saw the biggest contraction in prior quarters are now seeing the strongest bounce.

Fortunately, leading indicators show that the major developed economies are likely to continue improving in the coming months.

For example, on 7 August, the Organisation for Economic Co-operation and Development reported that its composite leading indicators for June 2009 showed signs of improvement in the economic outlook of OECD economies, with stronger recovery signs in several economies including Germany and the US.

And on 14 August, a report from the Economic Cycle Research Institute indicated that the US economy is likely to experience a strong recovery. The ECRI's weekly leading index rose to a 47-week high of 123.9 in the week to 7 August from 121.7 the prior week. The index's annualized growth rate jumped to a 26-year high of 13.4 percent from the prior week's 10.4 percent.

So it is looking increasingly likely that the global recession is coming to an end.


global economic recession said...

According to me we should take recession as good event, I know that all will disagree with me but I have some explanation on this, we all know that saving money, spending limited money are very much essential points for our financial security but still we don't follow it. Recession is the way by which we all can learn how to save and spend without any tutor for that.

Bank Rates said...

I would say yes. As we know that the worst of present ongoing economic recession is over and the markets all over the world are showing positive signs then we can say that yeah the global recession is coming to an end, most probably by mid of next year it will surely come to an end.

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