US Recession: Impact and the way forward
According to the “ International Comparison Program” of 2005, which recently published its report, the largest contributor to the world GDP is US at 23%. Next comes china with 10%, Japan with 7%, whereas India stands fifth at 4%. This GDP contribution is PPP adjusted, which means that it takes into account the latest currency movement where the USD had depreciated against ALL the major currencies of the world, and the Indian Re appreciation wasn’t an isolated event. US Recession: the impact We believe, that with 23% and more than double of its nearest competitor (China), US is too important an engine for the world to go into recession. Approx. a quarter of China’s GDP comes out of exports, and more than half of the total exports, are to the US. This means, that any slowdown in the US may immediately impact the GDP and hence the GDP growth of China too, immediately, ceteris paribus. This is just one case, and other countries like India again owe a major portion of their GDP to