GDP GROWTH NO MORE FOR 2009?!?!?!?!?!?

The International Monetary Fund (IMF) is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments, which measures the payments that flow between any individual country and all other countries. It is an organization formed to stabalize international exchange rates and facilitate development.

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SUMMARY

The International Monetary Fund announced on Wednesday, January 28th, 2009 that the global economy slowdown in 2009 will drag Canada fortunes down for at least two years.

According to its latest economic updates, they believe that the global economy will barely expand at all - growing a mere 0.5 % in 2009, the lowest rate in 60 years.

But even with the weaker forecast, it is expected that Canada will continue to outperform the U.S. economy in the following years due to the heavy crush down by the national mortgage turmoil while under the rule of Bush.

CONNECTION

During these economy downturns, the Keynsian economic theory is often taken into effect, where governments are actively involving in the growth and maintenance of the economy by increasing government spending to support the demand for goods and services, and hopefully, preserve employment.

Currently, job loss is a major concern for many. People’s disposable income is decreasing, and this will lead to low consumption in goods and services within the nation and therefore, decreasing the overall national GDP level.

REFLECTION

With the global economy coming to a virual halt, nations around the world is trying their best in controlling their financial budget and maintaining a steady flow of economic activities ties among the national / international market.

Now a days, we see a lot of hesitatinos in buyers. People are thinking more about how they spend their $, and everyone is trying to save as much as possible. In this case, most people save their money in the banks. With less money circulating and along with the multiplier effect, the negative impact on the economy is going be quite a hit. This is the reason why an effective governemnt and its ability (decisions made) to get itself back to tract is crucial to a country’s wellbeing.