This particular article is focusing on the problems the OECD report presents for Gordon Brown who is freely spending money to provide stimulus from the recession. The British economy is clearly in trouble and some have suggested (including George Soros this week) that the UK could be forced to reach out to the IMF for loans. Again, the British economy was too heavily focused on banking/finance so replacing that will not be easy or fast. The risk there is that there is too much spending with too little chance of recovery in site.
The US is also spending quite freely though the problems related to recovery do not appear to be as remote. Obama is going to need something to kick in soon enough but again, it's not nearly as dire as the UK situation. What this also suggests is that China could be in for more trouble. China is an export oriented country and even cheap goods are not making the cut these days. And as always, the poorest countries in the world will be hit hard. The Guardian:
The OECD expects global trade volumes to slump by 13% this year. "International trade is in freefall," it said.
It expects its member economies to shrink by an average 4.3% this year, with the United States contracting by 4%, the eurozone by 4.1% and Japan by 6.6%. It forecasts Britain's economy will shrink by 3.7% - the worst performance since the second world war.
Separately, the World Bank forecast that growth in the developing world would slow to just 2.1% this year from 5.8% in 2008.
"Across the developing world, we see that conditions of recession are affecting the poorest people, making them even more vulnerable than before to sudden shocks but also reducing opportunities available to them, and frustrating their hopes," said Justin Yifu Lin, the World Bank's chief economist.
