All the latest stats on the development impact of the global crisis

June 24, 2009

     By Duncan Green     

My colleague Richard King, an indefatigable number cruncher, has pulled together this handy summary of the latest stats. All updates welcome.

Unemployment (ILO)
· Gender impact of the economic crisis in terms of unemployment rates is expected to be more detrimental for females than for males in most regions of the world and most clearly in Latin America and the Caribbean (only regions where expected to be less detrimental for women are East Asia, developed economies, and non-EU south-eastern Europe and CIS)
· Global unemployment could rise to 220 million people (6.8 per cent) in 2009, up 39 million on 2007.
· Number of working poor (people unable to earn enough to lift themselves and their families above the poverty line) could rise to 1.3 billion ($2/day), 746m ($1.25/day).
· Under a worse case scenario, global unemployment could be as high as 239 million (7.4 per cent) in 2009.
· Under a worse case scenario, the number of working poor could rise to 1.4 billion ($2/day), 857m ($1.25/day).

Economic Growth (IMF / UN-DESA / World Bank)
· World economic output is expected to contract by 1.3 [2.6] {2.9} per cent in 2009, down from growth of 3.2 [2.1] {1.9} per cent in 2008, and 5.2 {3.8} per cent in 2007 (IMF [UN-DESA] {World Bank}).
· Economic output in emerging and developing economies [{developing economies only}] is expected to grow by 1.6 [1.4] {1.2} per cent in 2009, down from 6.1 [5.4] {5.9} per cent in 2008, and 8.3 {8.1} per cent in 2007 (IMF [UN-DESA] {World Bank}).

Bank Bailouts (IMF / calculation for Oxfam by James Henry)
· As of February 2009 headline support to the financial sector by advanced economies had reached 43 per cent of their GDP, compared with 2 per cent in emerging economies (IMF).
· On a worldwide basis, as of January 2009, banks and other financial service firms have already digested at least $8.7 trillion of state sponsored financing ($903 billion of government capital injections, $661 billion of toxic asset purchases, $1.38 trillion of subsidized loans, $5.76 trillion of debt guarantees). N.B. This is not all upfront cash – guarantees reflect the value of the insured assets (James Henry).

Fiscal Stimuli (ILO)
· Total fiscal stimulus packages are currently (March) 3.16 per cent of global GDP.

Poverty Impacts (UN-DESA)
· Between 73 and 103 million more people will remain poor or fall into extreme poverty in comparison with a situation in which pre-crisis growth would have continued.
· Most of this setback will be felt in East and South Asia, with between 56 and 80 million likely to be affected, of whom about half are in India. The crisis could keep 12 to 16 million more people in poverty in Africa and another 4 million in Latin America and the Caribbean.

Remittances (World Bank)
· Officially recorded remittance flows to developing countries were estimated to be $305 billion in 2008, up 8.8 per cent from $265 billion in 2007; but in real terms, remittances are expected to fall from 2 per cent of GDP in 2007 to 1.9 percent in 2008.
· In 2009, remittances to developing countries are expected to fall by 5.0 per cent to $290 billion – 1.8 per cent of developing countries’ GDP.
· Considering that remittances registered double-digit annual growth in the past few years, an outright fall in the level of remittance flows as projected now will cause hardships in many poor countries.
· The persistence of the migrant stock will contribute to the persistence (or resilience) of remittance flows in the face of the crisis.
· South-South remittances from Russia, South Africa, Malaysia and India are especially vulnerable to the rolling economic crisis. Also the outlook remains uncertain for remittance flows from the GCC (Gulf Cooperation Countries) countries.

Trade Flows (Bloomberg / IMF / World Bank)
· The Baltic Dry Index (a benchmark indicator of shipping costs, which serves as a proxy for world trade flows):
o Is 58 per cent lower than its one year high in June 2008
o Has recovered from its one year low in Dec 2008 (93% below June ’08 peak)
· IMF expects world trade volumes to contract this year, falling by 11.0 per cent 
· World Bank expects world trade volumes to contract this year, falling by 9.7 per cent 

Foreign Direct Investment (Institute of International Finance / World Bank)
· Volume of net private capital flows to emerging markets is likely to decline dramatically to $141 billion in 2009, after an estimated $392 billion in 2008, and a record volume of $888 billion in 2007 (IIF).
· A modest revival of flows is now starting to become evident and the IIF projects that the 2010 volume will reach $373 billion (IIF).
· Net private capital inflows to developing countries fell to $707 billion in 2008, a sharp drop from a peak of $1.2 trillion in 2007. International capital flows are projected to fall further in 2009, to $363 billion (World Bank).          

Vulnerable Countries (World Bank / IMF / Economist)
· According to the World Bank, 43 developing countries are highly exposed to the poverty effects of the crisis (with both declining growth rates and high poverty levels).
· The IMF identifies 26 highly vulnerable low income countries.
· The Economist identifies 17 vulnerable emerging-market economies on the basis of current account, short-term debt, and banks’ loan/deposit ratio.

Food and Oil Prices (FAO)
· Are now on the rise again after bottoming out in Jan/Feb.