Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Ragnar Nurkse's balanced growth theory wikipedia , lookup
Steady-state economy wikipedia , lookup
Economic growth wikipedia , lookup
Long Depression wikipedia , lookup
Non-monetary economy wikipedia , lookup
Chinese economic reform wikipedia , lookup
Business cycle wikipedia , lookup
Nouriel Roubini wikipedia , lookup
Transformation in economics wikipedia , lookup
-7 Key Issues for the New Parliament 2010 0 House of Commons Library Research 1 2 3 4 5 Quarters from last period of positive growth 6 ECONOMIC RECOVERY 7 8 Recession and recovery The recession was the ‘deepest’ recession (in terms of lost output) in the UK since quarterly data were first published in 1955. Actual growth in 2009 saw the sharpest fall in GDP (-5.0%) in a calendar year since official figures began in 1949 and the highest fall since 1931, excluding the recession following the Second World War. The slowdown affected all sectors of the economy, though manufacturing and construction were particularly affected. Grahame Allen A global downturn The UK is out of recession. Are we safe from return? And when will output recover to pre-recession levels? The downturn in economic activity was felt across the world, with many countries, including all G7 economies, falling into recession during 2008. So far, GDP has failed to return to pre-recession levels in all of the G7 countries. Following six consecutive quarters of negative growth, the UK economy finally moved out of recession in the last quarter of 2009. The economy had moved into technical recession in the third quarter of 2008 as GDP fell for a second successive quarter. At the height of the recession, GDP fell by 2.6% in a single quarter (Q1 2009) – the Recession and recovery same percentage by which the economy expandedAllen during the whole of 2007. Grahame The UK recession was longer than in other G7 countries - but not as deep as some A GLOBAL DOWNTURN The downturn in economic activity was felt across the world, with many countries, including all G7 economies, falling into recession during 2008. So far, GDP has failed to return to pre-recession levels in all of the G7 countries. The UK was in recession longer than the other G7 economies and was the last to exit. However, Japan (8.7%), Italy (6.9%) The recession was the ‘deepest’ recession (in and Germany (6.8%) suffered greater total The UKofislost outoutput) of recession. Aresince we safe from return? And when willthan output to pre-recession terms in the UK quarterly contractions in GDP the recover UK’s 6.4% levels? data were first published in 1955. Actual and both Japan and Italy have since suffered growth in 2009 saw the sharpest fall in a further quarter of negative growth. The Following six consecutive negative growth, the UK economy finallyEU moved out of recession in GDP (-5.0%) in a calendar quarters year sinceofofficial possibility remains that some Member figures began in 1949 and the highest fall States may experience a ‘double-dip’, the last quarter of 2009. The economy had moved into technical recession in the third quarter of 2008 since excluding thesuccessive recession following returning to recession after a short period of as GDP1931, fell for a second quarter. the Second World War. The slowdown slow growth. affected all sectors of the economy, though At the height of the recession, GDP fell by 2.6% in a single quarter (Q1 2009) – the same percentage by manufacturing and construction were which the economy expanded during the whole of 2007. particularly affected. 1 The 'deepest' recession since the Second World War 0 -1 -2 1990 Q3 1973 Q3 -3 1980 Q1 -4 % change from last period of positive growth -5 -6 2008 Q2 -7 0 1 2 3 4 5 Quarters from last period of positive growth 6 7 Quarter-on-quarter growth, OECD data 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 UK 0.6% 0.5% 0.5% 0.7% -0.1% -0.9% -1.8% -2.6% -0.7% -0.3% 0.4% Canada 1.0% 0.5% 0.3% -0.2% 0.1% 0.1% -1.0% -1.8% -0.9% 0.2% 1.2% France 0.4% 0.7% 0.3% 0.5% -0.4% -0.2% -1.5% -1.3% 0.3% 0.2% 0.6% Germany 0.3% 0.8% 0.1% 1.6% -0.6% -0.3% -2.4% -3.5% 0.4% 0.7% 0.0% Italy 0.2% 0.1% -0.5% 0.4% -0.6% -0.9% -2.2% -2.7% -0.5% 0.5% -0.3% Japan 0.2% -0.1% 0.4% 0.7% -1.1% -1.3% -2.7% -3.6% 1.5% -0.1% 0.9% US 0.8% 0.9% 0.5% -0.2% 0.4% -0.7% -1.4% -1.7% -0.2% 0.6% 1.4% COULD THE UK RETURN TO RECESSION? THE RETURN OF LOST OUTPUT Following two successive quarters of (albeit relatively slow) economic growth, the UK economy looks less likely than it once did to suffer a ‘double-dip’ recession. Government borrowing, though still high, is lower than previously forecast. Although unemployment has risen to around two-and-a-half million, this is lower than some predictions of three million or more. Despite some downward shocks, the FTSE 100 has risen strongly over the past year, and the housing market has shown increasing strength Output lost during the recession will not be recouped for some time yet. The latest Treasury forecasts are for growth of between 1% and 1½% in 2010, between 3% and 3½% in 2011 and between 3¼ and 3¾% in 2012. However, the latest average of independent forecasts suggests that the economy will grow by 1.3% in 2010, 2.1% in 2011 and 2.4% in 2012. However, the recovery remains far from secure. Though unemployment seems to have stabilised, employment has continued to fall. The impacts of possible tax rises and cuts to public expenditure are not fully known. Inflation is running well above the 2% target. The Bank of England’s base rate may yet have to rise as a consequence. Treasury forecasts suggest GDP may return to the pre-recession level in the second quarter of 2012; the latest average of independent forecasts suggests the first quarter of 2013. Regardless, it will be a long time yet before the UK economy recovers to its pre-recession position. 8 The 28 recession was the ‘deepest’ recession (in terms of lost output) in the UK since quarterly data were first published in 1955. Actual growth in 2009 saw the sharpest fall in GDP (-5.0%) in a calendar year 29