All the latest stats on the global crisis and its development impact

GEC logoinvaluable synthesis of the key data on the global economic crisis and its development impact. Here goes: Unemployment (ILO)  Gender impact of the economic crisis in terms of unemployment rates is expected to be more detrimental for females than for males in most regions of the world and most clearly in Latin America and the Caribbean (only regions where expected to be less detrimental for women are East Asia, developed economies, and non-EU south-eastern Europe and CIS) Continued labour market deterioration around the world in 2009 is forecast to produce an estimated increase in global unemployment of between 39 and 61 million workers relative to 2007, which could result in global unemployment ranging from 219 to 241 million – the highest level ever on record. Economic Growth (IMF)[UN-DESA] {World Bank} N.B. IMF figures are PPP, others are market rate World economic output is expected to contract by (1.4) [2.6] {2.9} per cent in 2009, down from growth of (3.1) [2.1] {1.9} per cent in 2008, and (5.1) {3.8} per cent in 2007. Economic output in emerging and developing economies [{developing economies only}] is expected to grow by (1.5) [1.4] {1.2} per cent in 2009, down from (6.0) [5.4] {5.9} per cent in 2008, and (8.3) {8.1} per cent in 2007. Based on World Bank data, in 2009 economic growth in developed countries will only be 1.3 per cent below 2007 rates, whereas in developing countries it will be 3.7 per cent lower. By 2011 growth in high-income countries will have recovered to just 0.2 per cent below 2007 rates; developing country growth will still be down by 2.4 per cent. Economic Growth Per Capita (UN-DESA) The number of countries in the world witnessing a decline in GDP per capita has increased from 16 in 2007 to 26 in 2008, to a forecast 107 in 2009. In the developing world the number of countries has gone from 0 to 12 to 33.   Public Finances (World Bank source 1 and source 2), (IMF) Financing shortfalls to cover at-risk core spending on health, education, safety nets, and infrastructure amount to about $11.6 billion (1.1% of GDP) for 60 of the poorest countries. Just over two-thirds of this is for countries in sub-Saharan Africa (World Bank). The crisis impact on health and education spending in these 60 countries will amount to $3.6bn (0.4% of GDP) (World Bank). Low-income countries are expected to face large external financing needs in 2009, estimated at around $59 billion (World Bank) The fiscal balance (including grants) in sub-Saharan Africa is projected to have declined by $69.2bn (constant 2008 USD) or 6.9% of GDP in 2009 from an estimated surplus of $20.8bn (2.1% of GDP) in 2008 to a deficit of $48.4bn (4.8% of GDP). In 2010 the fiscal deficit is still projected to be $32.5bn (3.1% of GDP) (IMF).       The external financing gap opened up by the economic crisis in developing countries is estimated between $352 billion and $635 billion in 2009 (between $30 and $45 billion in sub-Saharan Africa) (World Bank). Bank Bailouts (IMF)  (UN Secretary General)  As of May 2009, headline support to the financial sector by advanced economies had reached 50.4 per cent of their GDP, compared with 2.4 per cent in emerging economies. In the G-20 the support was 32.5 per cent of GDP (IMF). $18 trillion (almost 30 per cent of gross world product (GWP)) has been made available to recapitalize banks, nationalize financial institutions and provide guarantees on bank deposits and other financial assets (includes financial rescue packages (including government guarantees on bad debts) and liquidity injections into financial systems from 1 September 2008 to 31 March 2009) (UN SG). Fiscal Stimuli (UN-DESA) (IMF) Between 1 September 2008 and 31 March 2009, public funds committed to addressing the financial crisis totalled 33.8 per cent of global GDP or $21 trillion. Of this 4.3 per cent of GDP or $2.7 trillion represented fiscal stimuli (UN-DESA). · G-20 countries have adopted or plan to adopt fiscal stimulus measures averaging 0.5 per cent of GDP in 2008, 2.0 per cent in 2009 and 1.5 per cent in 2010 (IMF). Poverty Impacts (Chen & Ravallion, unpublished update of April paper, UN-DESA) The crisis will add 50 million people to the 2009 count of the number of people living below $1.25 a day, and 64 million people to number of people living under $2 a day (Chen & Ravallion). Given current growth projections for 2010, the cumulative impacts will rise to an extra 89 million people living under $1.25 a day and 120 million more under $2 a day by 2010 (Chen & Ravallion). Between 73 and 103 million more people will remain poor or fall into extreme ($1.25 a day) poverty in 2009 in comparison with a situation in which pre-crisis growth would have continued (UN-DESA). Most of this setback will be felt in East and South Asia, with between 56 and 80 million likely to be affected, of whom about half are in India. The crisis could, in 2009, keep 12 to 16 million more people in poverty in Africa and another 4 million in Latin America and the Caribbean (UN-DESA). Social Impacts (World Bank) At current growth projections it is estimated that there will be 30,000-50,000 excess infant deaths in sub-Saharan Africa in 2009 as a result of the economic crisis. Remittances (World Bank) Remittance flows to developing countries are expected to be $304 billion in 2009, down from an estimated $328 billion in 2008. The predicted decline in remittances by 7.3% this year is far smaller than that for private flows to developing countries.  Remittances are relatively resilient because, while new migration flows have declined, the number of migrants living overseas has been relatively unaffected by the crisis. The new forecasts show a 6.9 percent decline in remittances for the Latin America and Caribbean region (in large part because of a slowdown in the US construction sector), and 8.3 percent in sub-Saharan Africa. However, flows to South Asia and East Asia have been strong; but remittances are expected to decline somewhat in 2009. India, China and Mexico retain their position as the top recipients of migrant remittances among developing countries. Smaller economies such as Tajikistan, Moldova, Tonga, Lesotho, and Guyana are the top recipients in terms of the share of remittances in GDP; which exceeded a quarter of their GDP. South-South remittances from Russia, South Africa, Malaysia and India are especially vulnerable to the rolling economic crisis. Also the outlook remains uncertain for remittance flows from the GCC (Gulf Cooperation Countries) countries. Trade Flows (IMF) (World Bank source 1 and source 2),  (Bloomberg) IMF expects world trade volumes to contract this year, falling by 12.2 per cent  World Bank expects world trade volumes to contract this year, falling by 9.7 per cent Export market demand for low-income countries (LICs) is estimated to have fallen by between 5 and 10 percent in volume terms in 2009. In dollar terms, merchandise exports from LICs are anticipated to drop by 14.4 per cent in 2009, compared with a 22.8 per cent rise in 2008. The aggregate deficit on LIC trade has increased from $19.4 billion in 2005 to $48.6 billion (2009 estimate), or from 6.3 to 9.2 per cent of GDP (World Bank). The Baltic Dry Index (a benchmark indicator of shipping costs, which serves as a proxy for world trade flows): o Is 52 per cent lower than its one year high in September 2008 o Has recovered from its one year low in Dec 2008 (87% below September ’08 peak) Net Private Capital Flows (Institute of International Finance), (World Bank source 1 and source 2) Volume of net private capital flows to emerging markets is likely to decline dramatically to $141 billion in 2009, after an estimated $392 billion in 2008, and a record volume of $888 billion in 2007 (IIF). A modest revival of flows is now starting to become evident and the IIF projects that the 2010 volume will reach $373 billion (IIF). Net private capital inflows to developing countries fell to $707 billion in 2008, a sharp drop from a peak of $1.2 trillion in 2007. International capital flows are projected to fall further in 2009, to $363 billion (World Bank).  Net private capital flows to low-income countries declined significantly in 2008 to $21 billion from $30 billion in 2007 and are projected to drop further to $13 billion in 2009 (World Bank). In 2009, FDI in developing countries is projected to fall by 30 percent to $385 billion – a decline of about 1 percentage point of GDP (World Bank).         Vulnerable Countries (World Bank) (IMF) (Economist) According to the World Bank, 43 developing countries are highly exposed to the poverty effects of the crisis (with both declining growth rates and high poverty levels). The IMF identifies 26 highly vulnerable low income countries. The Economist identifies 17 vulnerable emerging-market economies on the basis of current account, short-term debt, and banks’ loan/deposit ratio. Food Prices and Hunger, Oil Prices (FAO source 1 and source 2), (Energy Information Administration, US) After bottoming out in Jan/Feb food and oil prices have risen again, though food (in general) and cereal prices fell slightly in Jul. Oil prices also fell slightly in late June, early July but have now picked up again. World hunger is projected to reach a historic high in 2009 with 1,020 million people going hungry every day. The most recent increase in hunger is not the consequence of poor global harvests but is caused by the world economic crisis that has resulted in lower incomes and increased unemployment. This has reduced access to food by the poor. This year, mainly due to the shocks of the economic crisis combined with often high national food prices, the number of hungry people is expected to grow overall by about 11 per cent. Almost all of the world’s undernourished live in developing countries. In Asia and the Pacific, an estimated 642 million people are suffering from chronic hunger; in sub-Saharan Africa 265 million; in Latin America and the Caribbean 53 million; in the Near East and North Africa 42 million; and in developed countries 15 million in total.]]>

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One Response to “All the latest stats on the global crisis and its development impact”
  1. Jennifer

    Gender’s role in economic inequality is finally getting the attention it deserves. With the finding;’ Gender impact of the economic crisis in terms of unemployment rates is expected to be more detrimental for females than for males in most regions of the world,’ world leaders should recognize how women are effected by the sexism perpetuated by our global institutions of government and finance.
    The projected increase in infant mortality will undoubtedly be the result of limited access to proper healthcare/basic resources for mothers. The trillions of dollars given to bail out the banks should be supplemented with funds put toward those living in extreme poverty by developed nations. At least ten percent of the funds put toward the banks should be distributed to the nations suffering the most during this global financial crisis. If we continue this cycle of inequality, the numbers of those living in poverty worldwide will only increase exponentially as time goes on. There doesn’t seem to be much relief in sight, ,which is unacceptable given the handouts the US is giving to those who have the least to loose.