Nine Signs That a New Global Recession Has Arrived

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Economists and policy makers in large countries and organizations like the International Monetary Fund and World Bank have expressed concern that the world has entered a global recession barely a year after the deep downturn of 2008-2009. Research supports that this recession will not be short or mild. The most obvious effects have materialized in the U.S., UK, EU and Japan. U.S. gross domestic product was sluggish at well under 2% expansion in the second quarter. Japan’s GDP fell 0.3% in the same period. Germany, the bedrock of the eurozone, said its GDP rose only 1% in the second quarter. The economic reality of these regions will seriously hamper the rapid expansion of the BRICs. The GDP growth in the BRIC countries is largely dependent on their exports to the developed world.

Read: The Nine Signs That A New Global Recession Has Arrived

Recessions are generally measured by GDP contraction, but there are other indicators that are nearly as important. Global shipping capacity is one of these. Civil wars are another because they can destroy entire national economies. The increase in the number of people who are malnourished is a marker for a global decrease in consumption of goods in the countries where the poorest live. Household incomes generally fall in a recession, and unemployment either rises or stays at very high levels established in a previous downturn. Government spending should help stimulate business and consumer activity, but decreases in it remove the single most important safety net that a faltering recovery needs.