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Economic Stabilization or Destabilization of Countries?

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Having performed small study on the information provided in the public space in relation to the global economy after yet another postponed “Brexit” transaction, I can draw a conclusion that the economic recession of some countries still moderately continues, while some countries have stable positions in the financial markets.

The economists have forecasted that in 2020 the decrease of the growth rate of the United Kingdom gross domestic product (GDP) down to 1%. It is clear that the global economic recession will creep up suddenly, if “Brexit” takes place without any agreement. It is also anticipated that Great Britain will be the most affected by global financial risks; it is hoped for the country to be sufficiently prepared for such situation now.

The trade war between the Unites States of America (USA) and China is still at the level of power games. At present it is observed, however, that the positions of China have weakened lately. The Chinese government forecasts that the growth of the country in 2020 will be less than 6.0%.

The most significant growth in the European Union has been observed in Central European countries, for example, in Poland. Almost as significant as the growth in Poland, it have been also in Belgium and in the Netherlands; while in the rest of the countries certain economic recession has been experienced.

Germany, the greatest economy of the euro area, is close to the recession. Its economic recession might also affect all neighbours. The European Central Bank has already lowered interest rates; however, the economists still have doubts, whether the measures taken would provide the desirable result.

The growth rates of Germany are almost the worst since 2013. On the one hand, the labour market is tensed with a very low level of unemployment, and the consumers’ expenditure has a stable increase. On the other hand, alongside with the decrease of production volume, the industry faces recession. Although Olaf Scholz, the minister for finance of Germany, states that Germany has no crisis, and the next year even growth could be expected, it should be pointed out that the uncertainty with regard to the transaction with the USA and the United Kingdom causes consequences.

The economic stability of the USA is destroyed also by rapid decline of automobile manufacturing. The output of automobiles from September till October has decreased by 7.2% in comparison to the year before – by 11.9%. But the investors are longing for stability and certainty in relation to the future economic policy.

It seems that India has a wait-and-see policy in all the economic theatre, and it scrupulously protects its positions from the observer’s angle, while reforms introduced by France already give the first results regarding the stabilization of economy, Germany fights to keep its positions; however, it should be pointed out that not all available resources have been used.

The labour market reforms of France bring positive tendency, which is related to the permanent increase of the growth rate of employment. The employment in France in the third quarter increased by 0.3% in comparison to the preceding quarter. Meanwhile, the industrial manufacturing continues to grow, even when neighbouring Germany faces drastic decline. France even could partially benefit from the less impact of global economic recession than it is in the case of Germany.

Mexico still faces the decrease of investment amount in business sectors. Its main problem is export-oriented industry. The investments into machinery and equipment decreased by 9.5%, but in the construction – by 0.1%, in the housing sector – by 3.4%. The investment issue partially reflects the problems of the huge automobile industry. The automobile export of Mexico during the first 10 months of the year decreased by 1.7%.

The number of the working unemployed in the all euro area has not changed significantly over the last three months. The lowest unemployment levels in the euro area were in Germany – 3.1% and in the Netherlands – 3.5%. The highest indicators were in Greece – 16.9%, Spain – 14.2%, Italy – 9.9% and in France – 8.4%.

The year 2020 might be important for economies of many countries on the whole; however, there should be evaluated also the complex preparatory work done in each country that have been carried out in conformity with the common measures of countries envisaged for the stabilization of economy.

 

 

 

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