Merrill Lynch has just revised its forecast for 2009 global GDP growth. Unsuprisingly the revision was downwards, taking the figure into negative territory for the first time since World War II, according to the bank. (Emphasis ours):
The goal we set for ourselves this week was to carefully review our forecasts for global real GDP growth in 2009 in light of the available data and to revisit the case for a (shallow) economic recovery in 2010. The outcome is a further decline in our forecast from 0.1% to -0.4% in 2009 and from 3.4% to 3.1% in 2010.
Admittedly, this is not a major revision, but it does take us into uncharted territory compared to the post-war experience of consistently positive growth. Moreover, the global figure would look significantly worse if we used nominal weights instead of PPP-adjusted ones – the reason being that the best-performing countries, China and India, have a lower weight in nominal terms. This is not a marginal point, as nominal weights are more important in assessing the impact of these projections on world trade and on the performance of global industries than the PPP-adjusted ones.:
Related links:
Depression *alert* – FT Alphaville
The global slumpometer – The Economist
Merrill: Unwinding the West – FT Alphaville