In mid-2008, we might be facing an economic recession in global proportions. There are important factors that caused this economic slowdown. These include the high oil prices which will lead to high prices of food. Since food production is dependent on the production process and transportation process on oil. This will be combined with the credit crisis and an increase in unemployment.
As early as January of 2008, the International Monetary Fund (IMF) already predicted that global economic growth will decline. It would be greatly affected by the United Stated Economy.
The IMF mentioned that the economic recession in the United States will be affected greatly by the financial market conditions and the continuing correction in the U.S. housing market. IMF predicted that the United States will have a mild recession in 2008 but will recover, although modest, in 2009.
Meanwhile, global growth would achieve little recovery in 2009, there is a 25 percent chance that the global economy would record 3 percent or less of growth in 2008 and 2009. This is already like saying that the world will encounter a recession.
United Nations has also predicted the same thing to happen. According to UN, the world economy growth was remarkable in 2007. There are more than 100 economies tat reported to have an increase of 3 percent. Meanwhile, developing countries are also showing promises. The economic growth average in developing countries was almost 70 percent.
But UN Conference on Trade and Development stated that there is clear disaster or danger for the world economy to standstill in 2008. The UN report stated that this economic standstill will hit many poor nations and would definitely end the boom in economic growth.