Global Economy at a crossroads
- “There are still several problems in the industrial countries which will result in slower growth for the coming years,” says former Central Bank President Vittorio Corbo.
Almost two years have passed since the international financial system freeze that followed the collapse of Lehman Brothers plunged the world economy into a deep recession. The global economic recovery, which began much earlier than anticipated, is weakening more and faster than previously expected.
The epicenter of the slowdown has been the U.S., Japan and China. In the U.S., GDP growth in the second half was sharply adjusted to a lower value (from a annualized 2.4% to 1.6%), and recent figures confirm the weakness of the economy.
At the same time, growth in Japan was reduced from and annual 4.4% in the first quarter to just 0.4% in the second, affected by the lower growth in the U.S. and China, the appreciation of the yen and the slowdown in local consumer purchases.
In China, the economy has also shown clear signs of overheating, leading the government to implement adjustment policies that will reduce growth to more sustainable rates.
In contrast, the Euro, driven by Germany’s powerhouse economy, had a good second quarter, growing at 3.9% annualized rate with more positive predictions for the rest of the year.