After the shock of Q1, the OECD is now forecasting 0 or positive growth for many countries.
Annualised Quarter on Quarter Growth
- US - 6%
- Japan - 11%
- Eurozone - 9.2%
- Germany - 13%
- UK - 9.3%
- US 2.4%
- Japan - 0.9%
- Eurozone -2.0%
- Germany -1.8%
- UK - 0.0%
The only three countries to technically come out of recession are Japan, Germany and France. Both Germany and France posted positive growth in Q2 of 2009.
However, even when a country returns to positive economic growth, it doesn't mean the recession will feel like it is over.
- Firstly, there is always a chance that a period of positive growth may be followed by more quarters of negative growth. For example, Japan posted annualised quarter growth of 3.3% in Q2 2009, but is forecast to slip back into recession with negative growth in the fourth quarter of 2009.
- Also, even when growth becomes positive, unemployment is likely to keep rising. Or at the very least, it will take a long time for unemployment to fall. For example, in the Eurozone the rise in unemployment has been muted by strong protection for labour; this means it is more difficult to fire workers, but, also means firms can be more reluctant to hire when the economy recovers. (see: Unemployment)
- Falling house prices and the ending of fiscal tax cuts will keep spending low and lead to sluggish growth. If growth is very low (e.g. less than 1%, there can still be a rise in spare capacity)
Note: Annualised Quarter on Quarter growth means we look at growth for an economic quarter and multiply by 4. e.g. if GDP fell by 2.3% in Q1 of 2009. This means the annualised quarter on quarter growth is -9.2%