The world economy has been in a severe recession since last winter and recovery has thus far been sluggish. Compared with the prior period, economic output in most industrial nations seemed to have returned to growth in the third quarter of 2009, although global gross domestic product (GDP) and above all global trade remained well below their prior-year levels.
In the United States, third-quarter economic output will in all probability be up again. Demand was driven primarily by expansive monetary and fiscal policy. Private consumption recovered slightly and investments stabilised. Nevertheless, economic activity remained at a very low level, leading the US Federal Reserve to keep its key interest rate at between 0% and 0.25%.
Asia is pulling out of the global economic crisis the fastest. As compared with Q2 2008, in China, second quarter GDP growth was back up to 7.9%. Growth was more pronounced in the third quarter, at 8.9%. The entire region is benefitting from China’s demand. In Japan, for instance, GDP appeared to have climbed again in the third quarter but it is expected to be more than 5% below the prior year’s level.
In the euro zone, GDP is expected to have risen again in the third quarter, driven by increasing demand for exports. However, GDP will still most likely fall below the prior-year figure by nearly 4%. The European Central Bank kept its key interest rate at a record low of 1% in order to boost the economy.
In Germany, the economic recovery that began in the second half of the year seems to have accelerated. Exports and new orders improved noticeably, albeit remaining at a very low level – a fact that was reflected in the Ifo Business Climate Index, which rose for the seventh month in a row.