Recession Watch
Niranjan Rajadhyaksha -
Thursday, November 13, 2008 1:29 PM
The leaders of the G20 group of rich and developing countries are to meet in Washington DC this weekend. A lot is expected from them, though I suspect they will not have enough time to come up with concrete proposals.
The mood of the meeting is likely to be grim. Here's a quick roundup of some of the news --- in no particular order --- that shows that the world is stumbling towards a recession.
1. US Treasury Secretary Hank Paulson more or less admits that his $700 billion bailout plan is not delivering results. He now has a Plan B.
2. China says that its industrial production is growing at its slowest rate in seven years.
3. The mood in Japan is glum, with companies expected to announce bad results.
4. The World Bank says global trade will shrink in 2009, the first time in 27 years. Lead indicator: The Baltic Dry Freight Index is down 90 percent.
5. The Bank of England forecasts a deep 18-month recession in the UK. Germany is already in recession, believed to be its worst in 12 years.
There's much more trouble out there. And thus reason for the leaders who will meet in Washington to stay focussed on the core issues.
There is one last thing worth noting: the problems have burst out of the confines of the financial sector and are flooding the real sector of output and jobs.
We will soon have to stop calling this a financial crisis and accept that it is becoming a wider economic crisis.