The current economic downturn is expected to end by June 2009, making it the worst recession since the Great Depression of 1929, says a poll of economists done by Wall Street Journal. This downturn will last for 18 months, as against the recessions of 1973-75 and 1981-82 both of which lasted 16 months. The economists have forecasted a contraction in GDP for the first two quarters of 2009 in the US economy. This would be the first time after the Second World War that the GDP has contracted consecutively for four quarters.
The economists have also said that the recession would have lasted a much longer period if not for the “ultra-aggressive combination of monetary and fiscal stimulus.” This comes in the backdrop of $14 billion bailout for the auto industry, which is waiting for the approval from the US Senate.
Morgan Stanley economists have said that the stability in the economy will come in late 2009 and a moderate recovery in 2010. The economists have also expressed confidence in U.S. President-elect Barack Obama’s economic team.
The dampening US outlook comes as the economic outlook for India also turns more gloomier. World Bank in it’s report Global Economic Prospects 2009 estimated India’s growth next year at 5.8%, and said the world is on the brink of a rare recession, with global trade expected to fall for the first time since 1982. Even the RBI Governor Subbarao has said that the economic outlook remains uncertain for India.