The worldwide economy realized real growth of 3.4 percent in 2007: in 2008 that same economy will only inch ahead by an estimated 1.6 percent. The collapse of the US housing market has sparked the single largest constraint to growth — the global credit crisis. In the chaos that stormed the financial markets this year, some of the oldest names in banking were destroyed.
The subsequent slowdowns in North American and Western European manufacturing sectors also put breaks on economic growth. And the year-end strengthening of the US Dollar against the Euro altered worldwide trade balances, further hampering economic expansion.
For 2009, global real GDP growth is estimated to be even lower — a fairly flat 0.3 percent — as economies work their way through the worldwide economic crisis. In ’09 we expect the developing world to again lead global growth, but by more modest amounts. In 2008, emerging economies expanded more than twice as fast as those of high-income countries. Robust growth in China, the Middle East, and parts of Eastern Europe in early ’08 was responsible for a good portion of the 1.6 percent increase the WW economy managed to measure this year. This growth was broadly based among emerging and developing economies.
... to continue reading you must be subscribed
