World Economy Survey 2009

01 Aug 2009

In June 2009, in spite of world economy recession, there were seen certain signs of its stabilization. The stabilization process was uneven for various countries.

Governments of the majority of countries together with their central banks continued to work on economy improvement, support of the financial sector, and raise of confidence in the banking system.

In June, social and economic indicators continued their fall; nevertheless, there were seen certain positive changes toward economic stabilization. In the Euro area, industrial output grew in May against the previous month, which slowed down its year on year decrease from 20.5% in April to 17.1% in May. In the USA, industrial output reduced by 0.6% in June as compared with its 1.1% decrease in May. At the same time, the year on year decrease slightly speeded up, making 15.5% in June versus 15.4% in May. Unfortunately, the unemployment rate grew, equaling 9.5% in both the USA and Euro area (the maximum level during the last 26 years and 10 years, respectively). Retail trade volumes continued to reduce. All these fact made a negative impact on the velocity of economies' revival.

The trend toward the year on year decrease in the inflation rate persisted. In the USA, consumer prices fell by 1.4% in June against their 1.3% decrease in May. In the Euro area, they diminished by 0.1% (in May: by 0.0%).

Dynamics of industrial production in the USA and Euro area (year on year), %

Dynamics of CPI in USA, Euro area, and Russia (year on year), %

The year on year growth of lending slowed down. Such situation restrained world economy revival. In the Euro area, the money supply growth slowed down, whereas in the USA, it speeded up from 8.8% in May to 9.0% in June.

An increase in long-term interest rates in developed countries and a rise in prices of energy carriers were chief negative factors preventing the economic growth.
In spite of unstable state of the world economy international financial organizations and governments of many countries continued to realize crisis-proof measures aimed at financial stabilization and economic revival.

Word economy: the USA and countries of the Euro area

Central banks of developed countries continued to carry out supporting financial policy, remaining interest rates unchanged. Interest rates of the USA Federal Reserve System, banks of Japan and England, European Central Bank and the Public Bank of China made 0.25%, 0.30%, 0.50%, 1.00% and 5.31%, respectively.

The Central Banks of Russia and Poland reduced their interest rates by 0.5 p.p. to 11.5% and 3.5%, respectively.

Basic interest rates of some central banks, %

Refinancing interest rates of central banks of some countries, %

Source: Bulletin of the National Bank of Ukraine


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