World economy in freefall

The Economist magazine published my all-time favourite chart again on 2nd May.

My admiration comes from the image capturing the essence of the world economy’s progress in a single line.

It records how overall economic growth has generally been around 3-4% a year recently, with two exceptions.

• The recession of 2008-09 saw a reversal to -2%.

• The coronavirus outbreak of 2020 is already showing signs of a far greater fall.

The chart also highlights China’s enormous contribution, representing around half of total global growth in recent years.

And it illustrates the limited contribution of North America, Europe and Japan compared with the other BRIC countries of Brazil, Russia and India despite their difficulties.

Another possible insight is that 2008-10 was a classic V-shaped recovery. Whereas 2020 is showing the beginnings of a U-shape.