Economy - overview:
2009 marked the first year in the post WWII era that global output - and per capita income - declined; output contracted 1% year-over-year, compared with average increases of about 3.5% per year since 1946. And global trade plummeted nearly 25% from 2008's level, the largest single year drop since WWII. Among major countries, the biggest GDP losses occurred in Russia (-8.5%), Mexico (-7.1%), Japan (-5.7%), Italy (-5.0%), and Germany (-5.0%), while China (+8.4%), India (+6.1%), and Indonesia (+4.4%) recorded the biggest gains. Among all countries, output increased the most in Macau (+13.2%) - top for the second consecutive year - Qatar (+9.2%), and Mongolia (+9.0%). In 2009, global per capita income fell about 2% to US$10,500, as global unemployment rose from just over 7% in 2008 to nearly 9% in 2009 - underemployment, especially in the developing world, remained much higher. Global gross fixed investment fell about 4% year-over-year, or by roughly $800 billion. World trade and financial imbalances unwound: from 2008 to 2009 current account surpluses or deficits fell for 4 out of every 5 countries as lower commodity prices, tighter credit, and, to some degree, greater protectionism reduced demand for traded goods. World external debt dropped more than 6% from the previous year, as new international lending disappeared. The global recession was a result of widespread uncertainties in the financial markets, bank failures, tighter credit, falling home prices, collapsing asset prices, lowered consumer confidence, and the drop in trade. In response to these conditions, many, if not most, countries pursued expansionary monetary and fiscal policies, and attempted to avoid protectionist policies. By the second half of 2009, the global economy appeared to be making halting, but forward steps.