Study predicts worldwide recession in 2009

According to the authors of the renowned Deloitte study called “Global Economic Outlook”, Continental Europe and Germany could come out stronger than before of the current economic recession. Apart from this the prospects are said to be rather bleak. According to the authors of the study, Great Britain would not pick up momentum until the year 2011 as well as Japan which would suffer from falling industrial output and consumer confidence as well as deflation in the year 2009. The growth of markets in China and India is also said to decelerate significantly over the months to come.

According to the study, Germany will have to face a reduction of 20% in incoming orders. In the whole of Europe, investment is predicted to stagnate or fall. In Spain unemployment would rapidly increase and the national debts of Italy and Greece are forecast to grow even more. Nevertheless, the authors of the study believe that due to a strong Euro, consolidated banks and an industry focussed on innovation Europe could come out of this recession stronger than before.

For Great Britain, however, the forecast given by experts is very negative: consumer confidence hit a bottom low, businesses do not invest any more, banks stick to restrictive credit policies. According to experts, the crisis will last significantly longer in Great Britain.

In China the worldwide drop in demand led to a decrease in Chinese of 2.2%. At the same time domestic demand in China is currently extremely weak. By taking fiscal measures the Chinese government was currently trying to strengthen domestic demand.

According to the Deloitte experts, India is currently facing a decline of its industrial sector. Domestic consumption was very weak and banks in India mistrusting each other. The Indian currency had lost 20% of its value against the dollar, but Indian exports could not benefit from this.

Russia’s main problem is falling prices of raw materials. Furthermore, many investors are withdrawing their capital from Russia and a breakdown in industrial output in October also weakened the Russian economy. However, despite the current recession, increasing inflation and a probable budget deficit in 2009 the repercussions of this crisis would not be as bad as those of the financial crisis in the year 1998.

According to the analysts, Japan is faced with a disaster. Industrial output is falling, there is a massive shortage of investment, private consumption is virtually at a minimum, financial markets do not properly work. For 2009 experts predict massive deflation with prices falling by up to 22% for some goods.

The complete study in English is available for free-of-charge download. GERMAN