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Fundranker Blog—Global Recession

Global Recession

The bad news just keeps on coming. The World Bank released a forecast this week saying that the world is on the brink of a rare global recession. It predicts that the global economy will eke out growth of 0.9% in 2009, down from 2.5% this year and 4% in 2006, but that world trade will fall next year for the first time since 1982. Deutsche Bank is even more pessimistic, forecasting global growth of only 0.2%, even less than the 0.3% recorded in 1982. Justin Lin, chief economist at the World Bank, summarized as follows, “We know that the financial crisis now is likely to be the worst since the 1930s.” The World Bank report gives hope that a recovery will begin to show results with 3% growth for the global economy in 2010.

Marc Ambinder, in his politics blog at the Atlantic magazine, recently wrote that it seems that Barack Obama’s economics transition team is very worried that the economy will get a lot worse before it gets better, as in double digit unemployment, huge declines in aggregate demand, and significant, persistent deficits. However, he also says that the general level of concern among Obama advisers and transition staffers is reassuring; that they actually get the magnitude of the problems and are paying attention.

The news these days has been inundating us with bits and pieces of the current bad economic climate. The World Bank and Deutsche Bank forecasts along with articles like Marc Ambinder’s help paint the big picture for us, and a bleak picture it is.

Posted 12/11/08 12:13pm ET in Economy