Source of the image: The Economist
By Naser:
Moody’s has compiled data of what nations of the world are in a recession (red), at risk of going into a recession (beige), or expanding (green). Most of the Western Hemisphere countries and Developed nations are, according to the figure, in a recession. Eastern Europe, South Africa (biggest African economy), and parts of South East Asia are as well in a recession. China, India, and a handful of other Emerging countries are expanding. Saudi Arabia is at risk of moving into a recession.
China is still expanding even though its economy depends on exports. Large stimulus packages and fast action by the government allowed China to sustain part of its growth rates. Many believe that China is the future, as domestic demand grows and Developed nations facing a period of no-movement as the true causes of the recession are not solved and are just being delayed.
What is interesting to see is that Saudi Arabia is at risk of moving towards a recession. The Saudi economy is highly dependant on oil, as are other Gulf countries. With oil prices rebounding from their lows and reaching levels beyond the $70 mark, one might expect that worst has passed the region. I guess the lack of government intervention and the uncovering of highly levered and insolvent companies (such as Saad and Al Gossaibi groups) leads us to a grimmer future.
(No Ratings Yet)
Loading ...Tags: AHAB, Mapping of the Recession, Moody's, Saad Group, Saudi Arabia, The Economist
very interesting, but to officially announce a recession you have to record a negative GDP growth for 2 consecutive quarters.. meaning that those at risk economies might be already in a recession but are awaiting a conformation and those who are in a recession might be taking off to the recovery stage.
[Reply]
Articulate. I bought the China story based on GPD growth numbers, Manufacturing numbers, Retail sales, Industrial Production, and Manager surveys. However, the core of the Chinese economy is their exports and these wouldn’t pick up until the US consumer starts his/her shopping spree again. Net trade is significantly negative in China (relative to historical numbers). the way the Chinese tried to solve that is by Capital formation. the only problem is pumping money will have to stop or its rate decrease soon or it will create a financial bubble (Chinese local shares are currently trading at a P/E of 35 times). Bottom line is that the US consumer will have to spend. Retail sales in China will never compensate for the US consumer spending because the Chinese lack a social net.
[Reply]
The map is just to give a better view of the countries of the world and their economies.
Keynes
I have met many people and they seem to believe that domestic consumption is the next big store with the US and other Developed nations enveloped in the recessionary cycle.
[Reply]
Regarding Manufacturing numbers, Retail sales, Industrial Production, and Manager surveys
Following link may provide some insight into the Chinese mentality on Chinese statistics.
http://www.aei.org/outlook/100061
[Reply]
Keynes: China Construction Bank said on Friday that it intends to reduce new loans by 70% during the second half of 2009. Do you think other banks might follow?
[Reply]
Yes, they will follow whatever the government tells them to do.
[Reply]
[...] reading the previous post “Mapping of the Recession“, I remembered an interesting paper I read a few weeks ago by Franklin Templeton Investments [...]