Swift, Steep Downturn Crosses Globe

Economists See Hope Dry Up

By Tomoeh Murakami Tse
Washington Post Staff Writer
Wednesday, February 18, 2009

NEW YORK, Feb. 17 -- Markets around the world plunged Tuesday as evidence mounted that the global economic crisis is worsening.

Japan is suffering its worst downturn in 35 years. The British economy is facing its sharpest decline in almost 30 years. Germany is slumping at its worst pace in nearly 20 years. Meanwhile, the job market in the United States, at the epicenter of the global downturn, is the worst in decades. And emerging economies are contracting at a pace few had predicted just months ago. Even China, whose economy still is growing at a 6.8 percent annual pace, is grappling with vast numbers of the unemployed, raising fears of unrest.

The sharpness of the global slowdown has alarmed economists, who see no obvious engine for recovery.

"Most Western developed economies are going to see the deepest downturn they've seen in a number of decades, in some cases possibly since the second world war," said Jonathan Loynes, chief European economist at Capital Economics, an independent consultancy in London. "If you go back six months or so . . . there was a hope that some parts of the world will escape the downturn from the U.S. economy and that would help to support the global economy as a whole. And that hope has now faded. We're seeing a downturn in virtually every area of the world."

(More here.)