After every depression, there is a shift of economic power happening. The last depression that hit the world in 1928-1929 caused a shift of economic power from Europe to the United States. Economic analysts say that what we are facing now is not only a recession but probably the greatest one after 1929. The meeting of G-20 last year acknowledged that another economic power shift will happen again. This time it is happening from the US to emerging economies in Asia, especially in China and India.
Even now as the US is still struggling to leave the global recession, China last Thursday announced that it’s fourth quarter Gross Domestic Products shot up a mind-blowing 10.7 percent. This is way surpassing expectations and also it is marking its fastest quarter growth since 2007.
In the meantime, the World Bank forecasts that India’s economy will grow at 7 percent this year and China at 9 percent. Furthermore, the World Bank also forecasts that the recession-weary US will only grow at 2.5 percent this year. This is contrary to what Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut forecast which was 4 percent of economic growth for the US. The US economic growth is mainly held back by the high unemployment rate and also the ever-increasing deficit and national debt. Still according the World Bank forecast, Europe is struggling to surpass even 1 percent of growth this year.
In the real estate market, it looks like China is ready to overtake the United States and become the world’s largest construction market by 2018. Close behind it will be India. This was released by the Global Construction Perspective last Thursday. The report also shows that the world’s 10 fastest-growing construction markets will be found in emerging economies.
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I don’t agree with it as Asian countries are more affected than US and other American countries when it comes to global economic crisis or global recession. Asian are more suffering from US when it comes to their economic stability.
Posted on January 24th, 2010 at 9:48 am
Unfortunately the current global economic crisis is a credit crunch caused by huge national debt and personal debts. The US’ saving rate is nothing compared to the Asian’s. Asian’s LOVE to save and pay using cash as opposed to using credit cards or taking out loans! Countries like Malaysia and Indonesia who is greatly influenced by the Islamic way of doing banking practices have been giving out credits very carefully and in a very conservative way… no usury. Exactly because of this, these countries are way more stable than the US in this crisis as the credit crunch did not hit them as much if not at all.
Posted on January 25th, 2010 at 7:13 pm
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