November 21, 2009

US and Asian GDP Return to Growth


American GDP is growing again.

After four consecutive quarters of GDP decline, the US Economy grew in the third quarter by 3.5%.  This ends the longest contraction in the US economy since the Great Depression. The 3.5 per cent growth figures were stronger than expected by some analysts, including Goldman Sachs, who had forecast only 2.7 per cent growth. 

Simultaneously, the IMF has doubled its forecast for Asian economic growth in 2010. 

The region’s prospects have improved dramatically over the past 6 months due to the concerted efforts of Asian Governments to nurse their economies back to health. China, South Korea, India, and Japan have taken the lead in this regard. The International Monetary Fund has forecast GDP growth of 2.8 per cent for 2009, and 5.8 per cent in 2010 for the region. 

The “Great Recession”, as it has come to be known, may be technically over according to the Economists, but it's been replaced by fears that this may only be a statistical recovery. The manifest growth in the US is literally underwritten by billions of dollars in US Federal government spending. Some economists posit that all of the government money in the US system will lead to an artificial and jobless recovery in America. Last month's US jobless rate was 9.8 per cent, its highest rate in 26 years. 

Nonetheless, third quarter figures indicate that 2010 will be a year of growth in the American economy, which is certainly reassuring news for the Global economy, as the US Economy is currently underperforming globally.

Posted via web from Global Business News

No comments: