International Economic Outlook

INTERNATIONAL ECONOMIC OUTLOOK By Evangelos Otto Simos ENdINg Of gLOBAL RECESSION IN 2010 I. Global assessment and outlook Following moderate declines in the third quarter of 2008, preliminary data on the fourth quarter of last year from quarterly national accounts suggest that the global economy has entered a steep contractionary phase of its business cycle. The combined output of the member countries of the Organization for Economic Cooperation and Development (OECD)—the 30 richest economies in the world—is estimated to have fallen at an annual rate of 6 percent from the previous quarter, the largest decline since OECD quarterly national income records began in 1960. In the fourth quarter of 2008, real output shrank by 6.2 percent in the United States and by 6 percent in the 27-country European Union. Likewise, the Japanese economy contracted by 13.7 percent in the fourth quarter of 2008, which was the third consecutive drop in the country’s real GDP and at a pace twice as fast as the declines in Europe and the United States. Looking at high-frequency indicators, e-forecasting’s global leading economic index suggests that a worldwide recession lies ahead in 2009. ...