Economics Weekly – Increased liquidity boosts recovery hopes

Global economic recovery gets underway

Global economic recovery gets underway

A global increase in liquidity has been underway in an attempt to kick start economic recovery ever since the depth of the financial crisis was understood. It appears to be working. A range of countries have recorded a rise in economic growth in Q2, including Germany, France and Japan, see chart a. For many of them, this was the first rise in economic activity in over a year, after sharp consecutive quarterly declines. However, the US and the UK recorded falls in economic activity in Q2. It is also noticeable that emerging market economies are bouncing back more quickly than developed economies, with annual gdp in Q2 up by 7.9% in China, by 6.1% in India and quarterly increases in Singapore of 20% and 9.7% in South Korea. In short, there are solid signs that conventional and unconventional policy loosening is helping to foster a global economic recovery.

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