International Economic Outlook

INTERNATIONAL ECONOMIC OUTLOOK By Evangelos Otto Simos SwIfT ANd COLOSSAL MONETARy INTERvENTIONS BRINg RECOvERy IN INdUSTRIAL COUNTRIES I. Global assessment and outlook In the third quarter of 2008, the worldwide banking crisis spread to non-bank financial institutions bringing financial markets to a standstill and the global economy into recession. The latest evidence from quarterly national accounts show that in the third quarter of 2008, the combined output of the member countries of the Organization for Economic Cooperation and Development (OECD)—the 30 richest economies in the world—was estimated to have declined at an annual rate of 0.4 percent from the second quarter. In the United States, real output edged down 0.5 percent following a 2.8 percent increase in the second quarter. Monthly GDP data clearly point to an output decline in the last quarters of 2008, thus the U.S. economy has entered a technical recession—two consecutive quarters of declining real GDP—in the third quarter of 2008. The Euro Area entered a technical recession in the second quarter of 2008 as real GDP declined by an annual rate 0.8 percent in both the second and third quarters of the year. ...