Global economy 2009: what to expect

The economic news is likely to get worse before it gets better and this will ensure a volatile ride, says SHANE OLIVER, Chief Economist, AMP. But there are signs that government policy is helping and that growth will stabilise/improve later this year. This is consistent with shares getting back on a sustainable recovery path this year.

It is obvious the global economic situation is bleak. The key problem in 2008 was the financial crisis, and given ongoing bank problems, this is clearly still with us. This year, the key problem will be the economic fallout.The economies of the United States, Europe and Japan are contracting in a synchronised fashion and this, along with a gathering…