Transcript Global Outlook: World, Middle East and Iran

Major “Global” Economic Slowdown
1
HowHow
longlong
willwill
thethe
recession
last?
recession last?
The Economy Tends to Move back to y*, which is prosperity
yt
How long?
Is it too late for a
stimulus package?
y*
date of
downturn
Return to
Prosperity
time
Need to have the stimulus packages out the door? Is it too late?
2
How long will the recession last?
The Economy Tends to Move back to y*, which is prosperity
yt
Average:
12.9 months
y*
date of
downturn
Return to
Prosperity
time
3
8.5 million jobs lost over 2008 - 2009
2008
2009
2010
4
Unemployment in US remains high
High Unemployment
Rates in the US
Expected to remain
For 2 years:
Low Inflation pressures
Implies unlikely US
Fed will raise interest
rates
5
US Federal Funds Rate
federal funds rate, which is the interest rate on overnight loans that
banks make to each other
6
Growth in US Debt Levels are unsustainable
12 Trillion
2006
8 Trillion
1990
4 Trillion
2001
6 Trillion
7
US GDP Growth
(
G
D
P
)
(GDP) Graph
G
r
a
p
h
8
Will there be a Double Dip
The Economy Tends to Move back to y*, which is prosperity
yt
Fragility in the recovery has raised
the possibility of a double dip
y*
date of
downturn
time
9
Major “Global” Economic Slowdown
8%
4%
2%
10
Growth Rates in Real Gross domestic product
12
Asian Economic growth has been impressive,…, and sustained
Developing Asia
Percentage Growth
10
8
6
4
European Union
Advanced
Economies
2
G7 Economies
0
-2
Source: IMF, WEO Data Base
11
Europe Badly affected, but
recovery is slow…..
2%
12
Some European Economies in
Great Difficulty
2 to -2%
13
Growth in World Output, IMF Projections, 2010
Growth in India and China were also severely impacted by the Global Crisis
15
Percentage Growth
10
5
2007
2008
2009
2010
0
United
States
Germany
France
Italy
Japan
United
Kingdom
Canada
China
India
-5
-10
Source: IMF, WEO Data Base
14
Gross Domestic Product, PPP based, Share of World Total
A shift in the world’s economic geography
30
25
20
India
15
China
United States
10
5
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: IMF, WEO Data Base
15
Shares of World GDP, 1820-2006
60
Percent
50
40
30
20
China
India
USA
10
0
1820
1870
1913
1950
1973
2001
2006
Year
Reproduced from presentation made by Professor Peter Pauly
Joseph L. Rotman School of Management, University of Toronto
16
China to overtake the US as world’s largest economy in 2040
India to overtake Japan in 2032
Reproduced from presentation made by Professor Wendy Dobson
Joseph L. Rotman School of Management, University of Toronto
17
Middle East Doing Well
9
8
7
6
5
4
3
2
1
0
8%
4%
4%
4%
1980 - 1989
1990-1999
2%
2000-2009
2010-2014
World
Advanced
economies
Newly
industrialized
Asian
economies
Middle East
Developing
Asia
The Middle Eastern Economies are expected to grow at the world average,
Significantly higher than that of the advanced economies, but below that of Asia
18
How About Iran?
Despite quite a good performance in Iran’s Growth
over the past decade, challenging times ahead
12.00
10.00
8.00
1980 - 1989
6.00
4.00
1990-1999
2000-2009
2010-2014
2.00
0.00
-2.00
19