Signs of a Lumpy Global Recovery

Aug.12.09 | About: AsiaInfo Holdings, (ASIA)

Globally, the second quarter is a study in contrasts. Consider the latest news from Japan:

Leading economists believe Japan's economy may have rebounded faster than previously expected in the April-June quarter, a government-affiliated group said in a report released Tuesday.

The country's gross domestic product may have risen 3.03% in annualized terms, surpassing the 1.98% rise forecast last month, according to the Economic Planning Association.

And from Singapore:

Singapore revised slightly higher its economic growth in the second quarter, but warned U.S. consumption must pick up to sustain the recovery.

Gross domestic product grew an annualized, seasonally adjusted 20.7 percent in second quarter, the Trade and Industry Ministry said in a statement Tuesday. The ministry last month initially reported a 20.4 percent expansion.

On the other hand, there's Latvia:

Latvia's gross domestic product shrank by 19.6% in the second quarter compared to the same period a year ago, the statistics office in Riga estimated on Monday. The number was slightly better than market expectations of a 22% drop. In the first quarter, Latvia's economy declined by 18% year-on-year.

And Russia:

Russia’s economy contracted the most on record last quarter as rising unemployment sapped consumer demand, bank lending stalled and the government failed to approve a stimulus package until just two months ago.

Gross domestic product contracted an annual 10.9 percent in the second quarter, the Federal Statistics Service said today, citing preliminary data...

Russia’s economic decline is worsening after output contracted 9.8 percent in the first quarter, ending 10 years of expansion that averaged close to 7 percent.

There is obviously a regional component here; in general, it's much better to be in Asia than it is in Eastern Europe, so far as this recession is concerned. But because of this, China bears watching closely indeed. The government in Beijing began tapping the brakes some in July by urging banks to curtail lending, the better to tamp down raging real estate and equity markets. On the other hand, the government continues to boost domestic investment to help offset the ongoing shortfall in export demand.

Global recovery from the recession is likely to be very lumpy, but there are risks to be found everywhere.

This article originally appeared on The Economist.com