Who Will Be Most Affected by the Crisis? Europe and Japan

January 30, 2009 10:30 AM

The economic news is grim the world over, but is it equally grim everywhere?

Based on the latest update of the IMF's World Economic Outlook (January 2009), we estimate which country groups and countries are expected to see the greatest decline in growth during the crisis compared to their precrisis performance.

In the table below, we compare the average of the WEO estimate for growth in 2008 and forecast for 2009 (column 3)—which we assume will be the crisis years—with the average growth rate in the precrisis period of 2005–2007 (column 2). The last column scales the estimated decline against the precrisis performance—the percent of precrisis growth reduced by the crisis. The top panel provides these estimates for groups and the bottom panel for the large countries in the WEO forecasts. Groups and individual countries are ranked by the magnitude of decline that they are likely to suffer as a result of the crisis.

The euro area is likely to be most affected by the crisis with a decline of 121  percent relative to its precrisis growth. Among the individual countries, Italy and Japan will be the hardest hit, while Brazil, China, and India—three large, emerging-market countries—are likely to be most resilient in the face of the global downturn.

 
 
Annual growth rate in percent
   
   
   
 
Economic Size (GDP, current $, bn)
Pre-crisis
Crisis
Decline in growth
Decline in growth (% of pre-crisis)
 
(avg. 2005-07)
(avg.2008-09)
Country Group Name 1
A
B
A-B
(A-B)/A

Euro area 
12,182
2.3
-0.5
2.8
121.6
Advanced economies
39,188
2.7
-0.5
3.2
118.3
Newly industrialized Asian economies
1,722
5.3
-0.9
6.2
116.9
European Union
16,906
2.9
-0.3
3.1
108.7
Other advanced economies
4,527
4.4
-0.3
4.6
105.7
Central and Eastern Europe
1,832
6.2
1.4
4.8
77.2
Commonwealth of Independent States
1,696
7.8
2.8
5.0
64.3
World
54,585
4.8
2.0
2.9
59.7
Western Hemisphere
3,609
5.3
2.9
2.4
46.1
Emerging and developing economies
15,397
7.7
4.8
2.9
37.6
Africa: Sub-Sahara
856
6.6
4.5
2.1
32.3
Developing Asia
5,761
9.6
6.7
3.0
30.9
ASEAN-5
1,080
5.8
4.1
1.8
30.6
Africa
1,100
6.1
4.3
1.8
29.2
Middle East
1,400
5.8
5.0
0.8
13.6

Country  Name
 
 
 
 
 
Italy
2,105
1.3
-1.4
2.6
205.1
Japan
4,382
2.1
-1.5
3.6
167.6
United Kingdom
2,804
2.6
-1.1
3.7
139.8
Germany
3,321
2.1
-0.6
2.7
128.8
France
2,594
2.1
-0.3
2.4
114.4
United States
13,808
2.6
-0.4
2.9
113.6
South Korea
970
4.8
-0.6
5.3
111.5
Canada
1,436
2.9
-0.3
3.1
108.6
Spain
1,440
3.7
-0.3
4.0
106.7
Mexico
1,023
3.7
0.8
3.0
80.0
Russia
1,290
7.3
2.8
4.6
62.3
India
1,101
9.4
6.2
3.2
34.2
China
3,280
11.3
7.9
3.5
30.5
Brazil
1,314
4.1
3.8
0.3
7.5
           

1. Country Group Composition.