The United States economic decline on 2008 will greatly affect the global economy. Being one of the largest economy in the world. Some reckless practices has brought the looming recession in the United States; no down payment, no verification of income/ assets/ jobs, interest rate mortgages, negative amortization, and teaser rates. Approximately 50 to 60 percent of the loans made in the banks were done through these reckless practices.
Economic recessions are not only distinct in the United States. European countries are also getting affected by economic slowdown. Denmark was confirmed to be in a recession. The economic growth in Denmark declined by 0.6 percent in the first quarter of the year. While Estonia and Latvia both entered recession in the second quarter of the year. While Sweden showed zero growth in the second water of 2008.
The British economy is also being hit by rising oils prices and credit crisis. Telltale signs that the British economy is entering recession, when the housing market fell in 2007. In the next quarter, the housing market went down twice its former figure. Currently the economic growth in United Kingdom is zero. This would be next to the negative economic growth that happened in second quarter of 1992. The current slowdown has ended 16 years of continuous economic growth, the longest period of economic expansion in Britain since the 19th century.
Economic crisis is also happening in New Zealand whose economy’s growth declined by 0.3 percent. Meanwhile in Australia, consumer confidence fell into a 16 year low economic growth in July. South Africa is being warned that it will enter a recession by this year. Japan has experienced a drop in economic growth, the first time in five years. Meanwhile, Canada’s economic growth has shrank in the first quarter of the year.