› Shinzō Abe speaks about the crisis, comparable to 2008

Shinzō Abe speaks about the crisis, comparable to 2008

Shinzō Abe expressed his concern over the situation in the world economy during the summit of the Group of Seven events. He compares the current events to 2008 ones. It was not supported by the other participants. However, they express concerns about the developing countries.

The head of the Japanese Government emphasizes that in the period from June 2014 to early 2016 commodity prices fell on average by more than 50%. A similar situation could be observed during the crisis of 2008-2009. The truth is that now it’s not all about bankruptcy of major banks, as it was with Lehman Brothers.

The representatives of other Group of Seven countries don’t talk about a crisis in the global economy, while aren’t denying that the developing countries are in a quandary.

The summit participants unanimously called for the need for more flexible fiscal policy to stimulate economic growth. In addition, the so-called stimulus programs should take into account the specific characteristics of each individual state.

The leaders of Britain and Germany indicated that they don’t consider the opportunities for stimulation in the near future. And that has certain logic. The UK economy is growing in line with expectations.

According to the recent data, the GDP growth rate in the UK for the first quarter amounted to 0.4 percent (compared to the previous quarter). As for the assessment of the annual growth, it is observed only a slight change - from 2.1 to 2 percent.

Analysts believe that the Japanese Prime Minister will use his statement in order to accept a new package of financial measures and not to raise the sales tax to 10% as previously expected.

However, Prime Minister of Japan is not so far from the truth. Many analysts expect the recession began in the United States. This is due to the fact that the maximum period of the US economic growth over the past decade was only 10 years. The current grow is continued for 7 years. It is possible that the growth cycle is coming to an end.

Of course, Japan's prime minister is unlikely to look that far. He has his own reasons for "panic", as noted above. Yet, one can’t deny the fact that recession could begin in the next few years in the US economy and we will witness a relapse of the situation with the economy stimulation and low interest rates. But the problem is that the Fed may simply not make it to raise the stakes high enough as there would be something to low in time.

In the euro area the situation is also far from ideal. Despite the fact that the Greek issue has already been removed from the agenda, it still needs to be solved. It is unknown whether the Greeks decide that carrying out of reforms should be continued or not. The dissatisfaction is growing within Greece itself because of the policy pursued by the ruling party, which came to power on a wave of rejection of the reforms, which were imposed from the outside to Athens (and which Greece still had to carry out because of the circumstances).

Economic growth in the euro area can’t also be defined as stable. The European Central Bank has enhanced its activity and has taken several stimulus steps in the last few years. But, as practice shows, the situation is still far from stable.

The situation in Japan, which is a country that hosted a summit this year, is rather strange at all. Many steps have been taken to stimulate the economy in recent years. But the contribution to economic growth they made seems to be smaller. Moreover, some steps only deepen the situation.

But such statements are only an opportunity to make good money on the asset fluctuations for binary options traders. Therefore, we recommend you to carefully monitor the situation and make the right conclusions.

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