Download Current Global Crisis

Current Global Crisis
Phoenix Ko
Motoyuki Suzuki
Global Overview

Global Economic Crisis Indicated by
• Global Inflation

High Oil / Commodities Prices
• Credit Market Crisis
• Increased Unemployment
• Stock Market Volatility
• Possibility of Global Recession
Effects in the U.S

Housing Market Correction
• Real Estate Market Dropped

Subprime Mortgage Crisis
• Poor Credit Loans Approved
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Declining in Dollar Value
Raise in Unemployment
Liquidity Crisis
Bailout of Financial System
Effects in the U.S

Real GDP Growth
2008 Mar Jun Sept Dec
2.5 2.1 0.8 --2007 1.3 1.8 2.8 2.3

Current
Interest Rate
1.00 %
Inflation Rate
4.9 %
GDP Growth
0.8 %
Trade Balance
- 56.47
Unemployment Rate
6.50 %
Effects in United Kingdom
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Rising Oil Price
Credit Market Crisis
House Price Dropped 8.1 %
Manufacturing Activity Declined
Unemployment Over 1.8 Million
Bank Rescue Package of £500 Billion
Effect in United Kingdom

Real GDP Growth
2008
Mar
2.4
2007 2.9

Jun
1.5
3.0
Sep Dec
0.3 --3.3 2.9
Current:
Interest Rate
Inflation Rate
GDP Growth
Trade Balance
Unemployment Rate
3.00 %
5.20 %
0.3 %
-2587.00
3.00%
Effects in Germany

Entered Recession in 3rd Quarter
• GDP Growth: - 0.4 % in 2nd Quarter
- 0.5 % in 3rd Quarter


Industrial Output Down 2.4%
Current Account Impact
• Export accounted 30% of Euro Economy

Unemployment Rate Raised
Effects in Germany

Real GDP Growth in Euro
2008
2007

Mar Jun
2.1 1.4
3.2 2.6
Sept
0.7
2.6
Dec
--2.1
Current:
Interest Rate
3.25 %
Inflation Rate
3.20 %
GDP Growth
0.7 %
Trade Balance
-9333.80
Unemployment Rate
7.5 %
Global Crisis on Asia
1.
2.
Overview Causes and Effects
Case Study for Financial Policies
against the Crisis.
1.
Japan
2.
China
Overview Causes and Effects


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Starting from US Financial Crisis by mainly
subprime mortgage problem.
Global economic crisis included high oil prices,
which led to both high food prices and global
inflation.
A substantial credit crisis leading to the bankruptcy of
large and well established investment banks as well
as commercial banks in various nations.
Global economic crisis increases unemployment and
the possibility of a global recession in Asia.
Case 1 JAPAN
Japanese Economy
 Japan is the 3rd largest economy in the world.
 accounted for 6.6% of the gross world product in 2007.
 has one of the highest GDP per capita, almost $34,000,
according to the International Monetary Fund.
Current Japanese Economic Situation
Country
Currenc Interes
y
t Rate
Inflatio
n Rate
GDP
Growth
Trade
Jobless
Balance Rate
Japan
JPY
2.10%
0.70%
88.50
0.30%
4.00%
Country
Japan
US
Japan
US
Japan
US
Japan
Subject
Descriptor
Units
Scale
2006
2007
GDP,
constant P
Yen
$
GDP,
constant P
Annual %
change
GDP, current
prices
Yen
$
GDP, deflator
Index
Bil
549,771.60
561,207.90
Bil
11,294.88
11,523.90
11,705.04
11,711.47
2.424
2.08
0.691
0.465
2.779
2.028
1.572
0.055
Bil
508,925.00
515,475.20
Bil
13,178.35
13,807.55
14,334.03
14,571.38
92.57
91.851
91.308
91.601
116.675
119.817
122.46
124.42
98.141
98.141
99.684
100.563
117.069
120.415
125.502
127.817
4.132
3.846
4.054
4.482
4.608
4.642
5.617
6.875
127.746
127.757
127.683
127.597
299.077
301.967
304.815
307.834
US
Japan
US
Japan
US
Japan
Inflation,
Ave.
consumer P
Index,
2000=100
Unemployment % of
rate
total LF
Population
Persons
Mil
US
Mil
International Monetary Fund, World Economic
Outlook Database, October 2008
2008
2009
565,086.34 567,711.69
515,970.15 520,028.79
Case 1 US vs. Japan (GDP Growth)
Case 1 JAPAN Highlights
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In June 2008, exports declined for the first time in about 5 years
falling by 1.7 %.
Exports to the US & EU fell 15.4 % and 11.2 % respectively.
The decline in exports and increase in imports cut Japan's trade
surplus $1.28 Bil a decline of 90 % from the previous year.
Many world economists states the Japanese economy most likely will
decline.
Taro Aso, a prime minister of Japan's ruling Liberal Democratic Party,
states Japan had entered a recession.
Japan's economy declined by 0.7 % in the 3rd quarter of 2008.
Japanese exports grew 0.3 % in August of 2008 compared to a year
before down from 8 % the previous month.
Exports to the U.S. fell 21.8 %, the biggest decline on record, and
exports to Europe fell 3.5 percent.
Case 2 China
Chinese Economy
 One of the fastest growing economies in the world.
 Since free market reforms in 1978 China's GDP has grown
an average 9.9 % a year.
 The second largest economy in the world with a GDP of $10.8 trillion
(2007) when measured on a purchasing power parity basis.
 In 2007, the nation accounted for 11% of the gross world product,
according to the International Monetary Fund.
 Current Chinese Economic Situation
Country
Currenc
y
Interest Inflatio
Rate
n Rate
GDP
Growth
Trade
Balance
Jobless
Rate
China
CNY
6.66%
9.00%
35.24
4.00%
4.00%
Subject
Country Descriptor
China
US
China
US
China
GDP, constant P
GDP, current
prices
Units
Scale
Annual %
change
Yuan
$
Billions
2006
2007
2008
2009
11.6
2.779
11.9
2.028
9.739
1.572
9.25
0.055
21,192.35 24,952.99 29,143.31 33,219.57
13,178.35 13,807.55 14,334.03 14,571.38
238.868
251.346
267.503
279.101
116.675
119.817
122.46
124.42
1.467
4.767
6.428
4.336
US
3.226
2.858
China
1,314.48 1,321.05
Population
Persons
Millions
US
299.077
301.967
International Monetary Fund, World Economic Outlook Database,
October 2008
4.224
1,327.66
304.815
1.844
1,334.30
307.834
GDP, deflator
Index
US
China
Inflation, ave.
consumer P
Annual %
change
Case 2 US vs. China (GDP Growth)
Case 2 China Highlights
A struggle was underway to see who would swallow the losses on US
Agencies and Treasuries.
Chinese economic stimulus plan
 On 11/09/08, the central government of the People's Republic of
China announced a RMB 4 trillion (US$586 billion) stimulus package
of capital spending plus income and consumption support measures.
 The 4 trillion yuan will be spent on upgrading infrastructure,
particularly roads, railways, airports and the power grid; on raising
rural incomes via land reform; and on social welfare projects such as
affordable housing and environmental protection.
 This plan is the biggest move to stop the global financial crisis from
hitting the world's fourth largest economy.
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Conclusion/Forecasting
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On November 3, 2008, the EU in Brussels predicted for
2009 only an extremely low increase by 0.1%, for the
countries of the Euro-zone.
They also predicted negative numbers for the UK (-1.0%),
Ireland, Spain, and other countries of the EU.
On November 6, the IMF at Washington, D.C., predicted for
2009 a worldwide decrease, -0.3%, of the same number,
on average over the developed economies.
Economically, the car industry is especially concerned; as a
consequence, several countries have already launched
immediate help-packages, each involving several billions of
dollars, Euros or pounds.
Thank you very much!
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