Does the World come out the Recession or it’s an Artificial Recovery?

HARGEISA, 18 Augusut 2009 (Somalilandpress) – The last ten years China showed the world double digit growth, and a lot of countries are willing and aiming to learn how they did it. China is world’s 3rd largest economy after U.S and Japan. China production spread everywhere in the world, for example Wall-Mart is the worlds’ largest retail company, and every eight dollar ($8) they sell one dollar ($1) is from Chinese product.

Economic well-being is measured by the quantity and quality of goods and services enjoyed by a nation, and this is basically refers to the production activity in the real sector. China economic is doing well, when we look the side of the construction or real state development that became nowadays’ economic focal point.

The eyes of the economic recovery, is once again in China and the current economic figures from China statistic bureau propelled those assumption (economic recovery). As we all know bad news spreads like wild fire or virus, and destroys everything that comes its way; but when it comes to the good news it spread at slowly base. That is why a lot of economists view the current figures as a slide fraction of a huge mountain or an Ice-Berge. Reawaking the trust is important to solve the current financial crisis.

Financial markets’ success depends on regulation success, and the decision makers have to prevent the economy to generate evil stories in order not to affect long run to come.

China is export oriented country that is why China lends money to U.S, in order to help them buy their products. China owes 80% of U.S debt treasure, and if U.S dollar drops its luster further more, it will be lose to the creditors (China). On the other side, if U.S debts to the foreign countries are equally divided to the worlds’ population, each person even recent born babies they will get $150 (hundred and fifty U.S dollar).

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China, India, and South East Asia they form more than 2/3 of worlds’ population, but when it comes to the consumption expense they can’t replace U.S market, because in 2007 U.S consumer expense it was more than $10 trillion; while China it was $1 trillion only, since they are saving oriented society.

However, the current figures don’t spell the end of the journey. A lot is needed to be done; and every country’s participation is significant, especially leading countries in order to ride out the world the financial crisis storm.

The stimulus package from Chinese government has a lot to do with the current results (from July economic activities). And a lot of changes are they way to happen, hopefully in positive trend.

Despite the China economy, latest figures show other countries are coming out of recession, including Germany, France and Hong Kong, that indicates the global slowdown is easing. Seijiro Takeshita, director of Mizuho Financial, Japan’s second largest banking group, told the BBC that the Japanese economy was now performing a “true comeback”.
“We are definitely getting out of the excessive pessimism that we have been seeing… however; a lot of big questions remain, namely private consumption,”.

France and Germany economy grow and show same figure (0.3%), and they are the biggest European economy, and that sign (growth figure) it will help Britain a lot, because they are export leaning country and their main market is other European countries such as Germany and France.

The main factor that contributed, the current unexpected growth percentage was the stimulus package that the each government provided or pumped to its economy, in order to ride out of the storm rapidly.

Recent economy figures that each government demonstrated, was beyond the expectation of economic expertises. Bear in mind, in order that remedy to work it probably and take the right course, it is necessity to merge it with cautious steps and to think beyond the box.

Although many analyst talk about the end of the financial crisis, and out of the dark tunnel, German Chancellor Angela Merkel has warned of excessive optimism about the end of the financial crisis. And most of analysts mention it is an artificial growth and if the decision makers did not handle it probably, it may harm the economy again.

Conclusion: The sense of uncertainty in the market (the slowdown or the red color in international financial markets) it is clear evidence, that world need more than the current economic figures. in order to get the ball rolling and bullish economy sign, strategies and tactics must now be designed and implemented sooner rather later. I believe it is significant to examine the current economic figures in dispassionate way, to put aside ideology and to look at the evidence before making a decision about if the world is out of recession and its way to recovery.

Amina Zahra Sheikh Omar Mohamud
E-mail: aminafurso@gmail.com

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