The recession of 2008 was one of the worst the developed world had ever seen. In a global context, however, it wasn’t so bad. That’s because China and India kept growing robustly, which helped power continued growth from commodity exporters in Latin America and Africa. The current round of economic troubles looks different.
We’ve already seen that Indian growth is slowding down, and now Brazil – which had been deliberately trying to slow down to fight inflation – has posted a somewhat shocking zero percent growth number for the third quarter. China, too, is forecasting a slowdown as export markets dry up. One way to read this is as all more gathering clouds of bad news for an American economy that otherwise showed some signs of hope. But an alternative reading is that a slowdown in China, especially, could actually be good for us by moderating pressure on commodity prices. Still for a while now those of us who like to brighten up the outlook have been able to say that though the past decade has been bad for America, it’s been excellent for the bulk of humanity. Now that trend toward strong growth in poor countries seems to be clearly abating.