Six of the 17 countries that use the euro currency are in recession. The U.S. economy is struggling again. And the economic superstars of the developing world _ China, India and Brazil _ are in no position to come to the rescue. They’re slowing, too.
The lengthening shadow over the world’s economy illustrates one of the consequences of globalization: There’s nowhere to hide.
Economies around the world have never been so tightly linked _ which means that as one region weakens, others do, too. That’s why Europe’s slowdown is hurting factories in China. And why those Chinese factories are buying less iron ore from Brazil.
As a result of this global economic slowdown, the International Monetary Fund has reduced its forecast for world growth this year to 3.5 percent, the slowest since a 0.6 percent drop in 2009. Some economists predict the global economy will grow a full percentage point less.
For now, few foresee another global recession. Central banks in China, Britain, Brazil, South Korea and Europe have cut interest rates in the past month to try to jolt growth. European leaders have begun to focus more on promoting growth, not just shrinking debt and cutting budgets.
The Chinese government, in particular, is expected to do what it takes to protect its economy from deteriorating too quickly. And despite their slowdowns, China and India are still growing at rates America and Europe can only imagine.