There's Upside Down Under
The past week has given market participants plenty of cause for concern, as warning signs of slowing growth in the world's developed economies continued to pour in. Last week's first-quarter GDP report for the U.K. indicated that a second consecutive quarter of contraction may have occurred, which is the widely accepted definition of a recession. Monday, it was announced that Spain's economy, the fourth largest in the eurozone, worsened by 0.3% -- its second consecutive quarter of contraction. Also yesterday, a GDP report from Canada showed growth slowed by 0.2% in February.
But a closer look reveals that the news might not be as bad as it seems. The U.K. figure was a preliminary GDP report, which is often inaccurate and tends to be heavily revised. U.K. GDP will be recalculated twice in the coming months, so perhaps we'll see a very different result when all is said and done. Canada's report was a monthly figure, as opposed to quarterly, and much of the weakness was blamed on temporary factors, such as the closing of some mines in Saskatchewan over safety concerns. Spain's GDP was weak, but not as weak as anticipated by that country's central bank, which predicted a drop of 0.4%. Things could be better, but maybe the global economy isn't going over a cliff after all....324 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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