Countdown to recession

We are currently witnessing the beginning of economic downturn in many countries.
Remember that a recession is defined by 2 consecutive quarters of negative economic growth. Based on the above definition, there is already one country in the recession list. It is Denmark, with New Zealand and Germany not far behind. Denmark’s economy has now contracted for two consecutive quarters, by 0.2 percent in the last quarter of 2007 and by 0.6 percent in the first quarter of 2008. With reports appearing last month that inflation had reached 18-year highs, the situation is not improving. The New Zealand economy shrank 0.3 per cent over the three months to March. Official growth figures for the second quarter are due in September.
For the second quarter, the German economy, one of the biggest in the euro zone, contracted for the first time in nearly four years, shrinking 0.5 per cent. Meanwhile, the French economy contracted by 0.3 per cent over the quarter, as did Italy’s, while Spanish gross domestic product was up by 0.1 per cent.
As for the Asia side, Japan said its own economy had contracted in the second quarter, as falling exports and weak consumer spending sent Asia’s largest economy hurtling toward its first recession in six years.
This time round, the downtrend will be slower and more gradual as compared to the financial crisis more than 10 years ago. The main reason being that various governments are willing to pump in the cash and bailout banks who are on the verge of collapsing. They wanted to prevent mass withdrawal by the public. Those who are unsucessful may take to the streets so protests and riots may occur. Unfortunately, this is done at the expense of taxpayers’ money and the effects will be felt for many years to come.