Brazil
Partial view of a Petrobras off-shore oil platform in Angra dos Reis, 180 km south of Rio de Janeiro.GDP: 5.23%
Inflation: 5.74%
Unemployment: 7.7%
Markets: -44.16%
Gallon of gas: $5.83
Interest Rates: 13.75%
Sinking crude prices are a tremendous blow to this oil-driven economy. The stock market is also suffering huge losses, dragged down by the country's oil giant Petrobras. Meanwhile, Brazil's real is down 35% against the dollar, since oil set a record high in July.
China
GDP: 9.74%
Inflation: 6.43%
Unemployment: 4%*
Markets: -64.92%
Gallon of gas: $3.48
Interest Rates: 6.66%
The country's GDP sinks to a 5-year low as manufacturing exports slow amid weak global demand. And mass layoffs at factories are worse than the official 4% unemployment rate suggests, since China does not track employment outside of major cities. A $586 billion government stimulus package aims to boost housing, health care and infrastructure, and includes tax breaks for struggling exporters.
Germany
GDP: 1.85%
Inflation: 2.94%
Unemployment: 7.43%
Markets: -41.12%
Gallon of gas: $8.58
Interest Rates: 3.25%
The German economy, which is Europe's biggest, slid into recession in the third quarter when its GDP contracted by 0.5%. And officials say that they don't expect to see any economic growth in 2009. Consumer confidence index is actually in negative territory, at -53.5, compared with an historical average of 27.1. The government hopes a $642 billion bailout will support the nation's banking system.
Iceland
GDP: 0.3%
Inflation: 7.93%
Unemployment: 2.2%
Markets: -45.81%
Gallon of gas: $7.54
Interest Rates: 18%
This tiny country is suffering near total economic collapse in the wake of the global crisis; in October its stock market crashed and its central bank went bankrupt. The Krona is down nearly 50% against dollar in past 6 months. Iceland receives $2.1 billion from International Monetary Fund, but says it will need $4 billion more.
India
GDP: 7.93%
Inflation: 7.93%
Unemployment: 7.8%
Markets: -51.48%
Gallon of gas: $4.95
Interest Rates: 7.5%
Consumer demand for gold, which typically soars during the Diwali wedding festival, sinks by roughly 20%, signaling trouble. The country's foreign debt expanded to 3.6% of its GDP in 2008, and in October the central bank lends $37.4 billion to financial institutions in October in an effort to boost credit.
Japan
GDP: 0.69%
Inflation: 1.57%
Unemployment: 4.05%
Markets: -42.45%
Gallon of gas: $5.78
Interest Rates: 0.3%
The sock market hits a 26-year low in October, and the government cuts interest rates for first time in more than seven years. It also unveils a $275 billion stimulus package, including loans for small and medium-sized businesses, as well as tax rebate checks to households.
Russia
GDP: 7%
Inflation: 14.03%
Unemployment: 5.9%
Markets: -65.53%
Gallon of gas: $3.93
Interest Rates: 11%
Sinking natural gas and oil prices shrink exports, and investor jitters over Russia's military takeover of Georgia crush the stock market. Russian banks are hit particularly hard by the credit crisis because they hold significantly more in foreign debt than national assets. The central bank sets up a $50 billion lending facility for financial institutions, and the finance minister indicates there is more money coming.
Saudi Arabia
GDP: 5.85
Inflation: 11.45%
Unemployment: 13%†
Markets: -50.5%
Gallon of gas: $0.45
Interest Rates: 4%
OPEC production cuts in October hit this country the hardest -- it signals that it can't afford to cut back any more. Falling oil prices are hampering the economy and holding up much-needed public construction projects. Meanwhile, the cost of living here is soaring on escalating food and housing costs.
South Africa
GDP: 3.83%
Inflation: 11.78%
Unemployment: 23.2%
Markets: -30.64%
Gallon of gas: $4.64
Interest Rates: 12%
Metals exports such as gold and platinum are hurt by falling precious metals prices, and soaring food and electricity prices are driving a steep increase in inflation. Unemployment had hit a seven-year low in March, but is rising as the economy slows.
United Kingdom
GDP: 0.99%
Inflation: 3.78%
Unemployment: 5.4%
Markets: -34.2%
Gallon of gas: $8.09
Interest Rates: 3%
Both the Prime Minister and the Treasury chief say the British economy is likely in a recession. The pound is at a 6-year low against the dollar, and retail sales are down for first time in nearly 4 years. A $63 billion bailout for the banking sector offers some relief.
United States
GDP: 1.57%
Inflation: 4.22%
Unemployment: 5.62%
Markets: -33.10%
Gallon of gas: $3.8
Interest Rates: 1%
Home prices plummet by as much as 40% in some parts of the country, and nearly one million homes have been lost to foreclosure since the mortgage crisis began in August 2007. The government is flooding the frozen financial system with nearly $3 trillion to restore liquidity, and, despite a $168 billion stimulus package that was unveiled last spring, political support for a second stimulus package is gaining momentum.
Monday, November 17, 2008
Japan's Economy Shrinks 0.4%, Confirming Recession
Japan's economy, the world's second largest, unexpectedly shrank in the third quarter, entering the first recession since 2001 as companies cut spending.
Gross domestic product fell an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period.
The slowdown may deepen as the global financial crisis hurts exports, prompting companies from Toyota Motor Corp. to Canon Inc. to slash profit forecasts and cut investments. Japan has the lowest interest rates among the 20 biggest economies and public debt that exceeds 180 percent of GDP, limiting the government's ability to stimulate growth.
``It's only going to get worse,'' said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. ``Japan may be entering its deepest recession in a decade as the global financial crisis cools demand overseas.''
The yen fell to 97.49 per dollar as of 12:57 p.m. in Tokyo from 96.09 before the report. Japan's currency has gained 8.9 percent since the end of September, compounding exporters' woes.
The Nikkei 225 Stock Average rose 2.7 percent, reversing declines of as much as 2.9 percent, as investors bought shares of drug and utilities companies, whose earnings are less vulnerable to a slowdown. The gauge has lost 43 percent this year. The yield on Japan's 10-year bond was unchanged at 1.5 percent.
G-20 Summit
The economy last contracted over two consecutive quarters -- the technical definition of a recession -- in 2001. Europe also entered a recession last quarter, a report showed last week.
Leaders from the Group of 20 nations this weekend agreed to take a ``broader policy response'' by using interest-rate cuts and fiscal stimulus to shore up the weakening global economy. The Bank of Japan has little scope to contribute further after lowering the benchmark rate to 0.3 percent last month, and a 5 trillion yen ($52 billion) stimulus plan announced by Prime Minister Taro Aso last month risks worsening the public debt.
Quarter-on-quarter, Japan's economy shrank 0.1 percent, today's report showed. Capital spending fell 1.7 percent from the previous three months, compared with economists' expectations of a 2 percent drop.
Toyota, which makes more than three-quarters of its sales abroad, forecast profit will fall this fiscal year by almost 70 percent. The carmaker will fire 3,000 workers by March, and the Nikkei newspaper reported this month that it will delay adding capacity at a domestic plant that makes Lexus sedans.
Canon Cuts
Canon, the world's largest camera maker, last month forecast profit growth would fall for the first time in nine years and said it will cut capital spending 4.7 percent in 2008 to 410 billion yen.
``The economy is still so sensitive to the global business cycle,'' said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo. ``A long as the global economy keeps sinking, Japan will probably experience a deep recession.''
Net exports subtracted 0.2 percentage point from growth after imports outweighed an increase in shipments abroad. Exports rose 0.7 percent, less than the 1.2 percent expected. Imports climbed 1.9 percent as oil surged to a record in the quarter. Economists predicted a 1.5 percent gain.
``Given that the global economy is decelerating, Japan's downturn will continue,'' Economic and Fiscal Policy Minister Kaoru Yosano said after the report. He said there's a risk that that the slump will become ``more severe'' because the global financial crisis is spreading to emerging economies.
Economic growth in China, which became Japan's biggest customer in July, slowed to 9 percent last quarter, the weakest since 2003.
May Suffer Less
Still, Japan will probably suffer less than its biggest counterparts after companies shed debt and streamlined labor forces following the bursting of the property and asset bubble in the early 1990s. Asia's biggest economy will shrink 0.1 percent next year, according to the Organization for Economic Cooperation and Development, less than the 0.9 percent and 0.5 percent contractions in the U.S. and Europe.
Consumers are getting some relief as inflation abates and the government prepares to provide households with at least 12,000 yen ($125) each as part of the stimulus plan. Consumer spending increased 0.3 percent last quarter, more than the 0.1 percent economists expected, today's report showed.
``Though consumer spending was a positive figure, it's difficult to take it as a good sign because the figure was boosted by seasonal factors such as the hot summer and the Olympics,'' said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo. ``Consumption will probably turn negative in the fourth quarter'' and the economy won't recover until 2010, she said.
The ratio of jobs to applicants has fallen for eight months and the deteriorating profit outlook for companies is also putting pressure on wages. Winter bonuses, which typically account for about 10 percent of a fulltime worker's annual pay, will fall 2.9 percent this year, the Nikkei reported last week.
Gross domestic product fell an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period.
The slowdown may deepen as the global financial crisis hurts exports, prompting companies from Toyota Motor Corp. to Canon Inc. to slash profit forecasts and cut investments. Japan has the lowest interest rates among the 20 biggest economies and public debt that exceeds 180 percent of GDP, limiting the government's ability to stimulate growth.
``It's only going to get worse,'' said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. ``Japan may be entering its deepest recession in a decade as the global financial crisis cools demand overseas.''
The yen fell to 97.49 per dollar as of 12:57 p.m. in Tokyo from 96.09 before the report. Japan's currency has gained 8.9 percent since the end of September, compounding exporters' woes.
The Nikkei 225 Stock Average rose 2.7 percent, reversing declines of as much as 2.9 percent, as investors bought shares of drug and utilities companies, whose earnings are less vulnerable to a slowdown. The gauge has lost 43 percent this year. The yield on Japan's 10-year bond was unchanged at 1.5 percent.
G-20 Summit
The economy last contracted over two consecutive quarters -- the technical definition of a recession -- in 2001. Europe also entered a recession last quarter, a report showed last week.
Leaders from the Group of 20 nations this weekend agreed to take a ``broader policy response'' by using interest-rate cuts and fiscal stimulus to shore up the weakening global economy. The Bank of Japan has little scope to contribute further after lowering the benchmark rate to 0.3 percent last month, and a 5 trillion yen ($52 billion) stimulus plan announced by Prime Minister Taro Aso last month risks worsening the public debt.
Quarter-on-quarter, Japan's economy shrank 0.1 percent, today's report showed. Capital spending fell 1.7 percent from the previous three months, compared with economists' expectations of a 2 percent drop.
Toyota, which makes more than three-quarters of its sales abroad, forecast profit will fall this fiscal year by almost 70 percent. The carmaker will fire 3,000 workers by March, and the Nikkei newspaper reported this month that it will delay adding capacity at a domestic plant that makes Lexus sedans.
Canon Cuts
Canon, the world's largest camera maker, last month forecast profit growth would fall for the first time in nine years and said it will cut capital spending 4.7 percent in 2008 to 410 billion yen.
``The economy is still so sensitive to the global business cycle,'' said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo. ``A long as the global economy keeps sinking, Japan will probably experience a deep recession.''
Net exports subtracted 0.2 percentage point from growth after imports outweighed an increase in shipments abroad. Exports rose 0.7 percent, less than the 1.2 percent expected. Imports climbed 1.9 percent as oil surged to a record in the quarter. Economists predicted a 1.5 percent gain.
``Given that the global economy is decelerating, Japan's downturn will continue,'' Economic and Fiscal Policy Minister Kaoru Yosano said after the report. He said there's a risk that that the slump will become ``more severe'' because the global financial crisis is spreading to emerging economies.
Economic growth in China, which became Japan's biggest customer in July, slowed to 9 percent last quarter, the weakest since 2003.
May Suffer Less
Still, Japan will probably suffer less than its biggest counterparts after companies shed debt and streamlined labor forces following the bursting of the property and asset bubble in the early 1990s. Asia's biggest economy will shrink 0.1 percent next year, according to the Organization for Economic Cooperation and Development, less than the 0.9 percent and 0.5 percent contractions in the U.S. and Europe.
Consumers are getting some relief as inflation abates and the government prepares to provide households with at least 12,000 yen ($125) each as part of the stimulus plan. Consumer spending increased 0.3 percent last quarter, more than the 0.1 percent economists expected, today's report showed.
``Though consumer spending was a positive figure, it's difficult to take it as a good sign because the figure was boosted by seasonal factors such as the hot summer and the Olympics,'' said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo. ``Consumption will probably turn negative in the fourth quarter'' and the economy won't recover until 2010, she said.
The ratio of jobs to applicants has fallen for eight months and the deteriorating profit outlook for companies is also putting pressure on wages. Winter bonuses, which typically account for about 10 percent of a fulltime worker's annual pay, will fall 2.9 percent this year, the Nikkei reported last week.
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