The International Monetary Fund has come out with its latest set of forecasts of the world economy. The report says at one point:
The IMF staff now sees a 25 percent chance that global growth will drop to 3 percent or less in 2008 and 2009—equivalent to a global recession.
Why is 3% growth equivalent to a ‘global recession’? In the U.S., a recession means, basically, that economic activity is shrinking. There’s something puzzling about calling 3% world economic growth a recession.
I think it means that it would be so politically disastrous for China to drop below 5% or so growth for a full year that the economists at the IMF don’t want to even think about it.
By this definition, the world economy has been in recession 1980-83, 1990-93, 1998, and 2001-2002. In other words, 11 out of the last 28 years. There are no negative years of world growth.
Here are the IMF’s latest world growth numbers, and forecasts out to 2013.