World Economic Trends
Following the deep global recession in the previous year, the beginning of financial year 2009/2010 (1 October to 31 December 2009) saw the global economy return to growth. Global GDP increased by 2.6 percent in the first quarter of 2009/2010, after falling 0.2 percent in the preceding quarter. Once Western governments and central banks had tempered the collapse in the financial system set off by the Lehman Brothers bankruptcy with targeted action, companies began to invest again. The economy picked up especially strongly in emerging markets. Mature markets still recorded a slight decline; however, at 0.7 percent, this was significantly slower than in the previous quarters. Please also take note of chart at the bottom of the site.
As the financial year progressed, global real GDP continued to increase. The second quarter of 2009/2010 saw year-on-year growth of 4.5 percent, the third quarter as much as 5.0 percent. Experts from Oxford Economics confirm an increase of 4.5 percent for the last quarter of the financial year.
Growth in the financial year was notably driven by emerging markets, which accounted for 8.9 percent of growth in the period from January to March 2010, and 8.6 percent in the period from April to June. In line with expert forecasts, growth slowed slightly to 7.4 percent at the end of financial year 2009/2010. In China in particular, the upswing is currently losing momentum, although growth is still higher than average compared with mature markets. The economy is being slowed down by slackening monetary policies, as the central bank is taking targeted measures to throttle back growth in lending.
Mature markets also recorded continuous growth in real GDP in the financial year due to increased exports and capital investments. Clear signs of improvement were particularly apparent in leading industrial nations such as the USA and Japan. The US economy showed a positive trend compared with the previous year, recording steady growth in each of the four quarters. However, compared to the powerful upswings that followed past economic crises, the current economic trend is relatively non-dynamic. Companies had already restocked their warehouses, hence investments in inventory especially played a much less significant role as a growth driver. Furthermore, the labour market situation improved only slowly. It was also hard for governments and central banks to judge the risk posed by the debt crisis in various euro zone countries.
The following chart provides an overview of growth in real GDP compared with the prior-year period:
