Tuesday, August 18, 2009
Since the G7 have now reported Q2 2009 GDP, except for Canada who doesn't go through the excruciating process of multiple release dates for the same GDP report, I decided to update my really scary charts series (name stolen from the Financial Ninja) for G7 growth. And I see a high degree of synchronization during this Great Global Recession.
One would think that this is always what it's like during a global recession. This made me think of the IMF's April World Economic Report, which described global recessions in detail, as indicated in the IMF Survey report:
In addition to the current cycle, there were three other episodes of highly synchronized recessions: 1975, 1980, and 1992. These recessions were on average longer and deeper. Distinct from other episodes, the recoveries from these recessions feature much weaker export growth, especially if the United States is also in recession.Yeah right, highly synchronized. Actually, this recession is redefining synchronized GDP growth. Look at the degree (or lack of) correlation among the same series, ex Germany, spanning the years 1980-1983. There is a 6-country dip in Q2 1980 (the IMF global recession). However, the rebound during the 1983 recovery - when the US (roughly 25% of global GDP) clawed its way back from 2 recessions in 3 years - appears to be more synchronized than the dip in 1980.
Yup, this one's been bad.