by Dwaine van Vuuren
Reposted from Recession Alert with written permission.
The following charts and text are an extraction from our monthly Global Recession Report, one of 3 weekly and 5 monthly reports we issue 17 times each month for an all-inclusive $395 per annum.
We have all the numbers in for quarter-on-quarter GDP growth for Q4-2012 from around the world. Since our last report in February “World plunges into recession”, the percentage of countries with negative q-on-q GDP growth (1 and 2 consecutive quarters) have improved somewhat as more countries came into the sample and GDPs revised upwards. But we are still at worrying global recessionary levels (the blue and black dotted lines.) There is no doubt we are in the depths of a second global recession since the 2008 Great Recession, but amazingly the U.S seems to have skirted it (so far.)
An inspection of individual countries & trading bloc’s gives one pause for some thought. Europe (25% of world GDP) and the G7 bloc (54% of GDP) are in “mild recessions” (only 1 quarter negative growth) whilst all of the “traditional recession” (at least 2 quarters negative growth) countries are isolated to Europe and make up only 9% of world GDP. Whilst the countries that are in “Expansion” make up 74.8% of world GDP, the GDP-weighted bloc shows we have tipped into “mild recession” in Q4-2012. The “non-trivial” economies that are of concern at the moment are France (4% of world GDP) , Germany (5.4%), Italy (3.2%), Spain (2.2%), UK (3.9%) and the U.S (25%) that appears on the brink.
The wild card is the U.S – at 25% of world GDP. If she plunges into recession its curtains for everyone else. The initial GDP print of -0.1% gave everyone a fright (although we have always maintained this was a manifestation of the many short leading indicators that curled over 6 months back and the long-leading indicators that signalled near-recession 14-18 months back.) but this was revised up to 0.1 and then 0.4%. Taking the 0.4% final estimate reading for U.S 4Q2012 GDP and the 1st estimate for GDI, our GDP/GDI Recession Model signals 24% probability of recession:
NOTE : The above charts and text are an extraction from our monthly Global Recession Report, one of 3 weekly and 5 monthly reports we issue 17 times each month for an all-inclusive $395 per annum.
Additional charts and discussion available at Recession Alert.