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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.

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Current Global Crisis

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  1. Current Global Crisis Phoenix Ko Motoyuki Suzuki

  2. 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

  3. Effects in the U.S • Housing Market Correction • Real Estate Market Dropped • Subprime Mortgage Crisis • Poor Credit Loans Approved • Declining in Dollar Value • Raise in Unemployment • Liquidity Crisis • Bailout of Financial System

  4. 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 Inflation Rate GDP Growth Trade Balance Unemployment Rate 1.00 % 4.9 % 0.8 % - 56.47 6.50 %

  5. Effects in United Kingdom • 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

  6. Effect in United Kingdom • Real GDP Growth 2008 Mar Jun Sep Dec 2.4 1.5 0.3 --- 2007 2.9 3.0 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%

  7. 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

  8. Effects in Germany • Real GDP Growth in Euro 2008 Mar Jun Sept Dec 2.1 1.4 0.7 --- 2007 3.2 2.6 2.6 2.1 • Current: Interest Rate Inflation Rate GDP Growth Trade Balance Unemployment Rate 3.25 % 3.20 % 0.7 % -9333.80 7.5 %

  9. Global Crisis on Asia Overview Causes and Effects Case Study for Financial Policies against the Crisis. Japan China

  10. Overview Causes and Effects 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.

  11. 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

  12. Case 1 US vs. Japan (GDP Growth)

  13. Case 1 JAPAN Highlights 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.

  14. 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

  15. Case 2 US vs. China (GDP Growth)

  16. 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.

  17. Conclusion/Forecasting 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.

  18. Thank you very much! Any Questions?

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