This is their second cut with fears over Europe
If you enjoy the content at iBankCoin, please follow us on TwitterMarch 13 (Bloomberg) — Goldman Sachs Group Inc. cut its forecast for the global economy for the second time in eight days after predicting a deeper recession in Europe.
“Following the reduction of our Euroland growth forecast to minus 3.6 percent in 2009, the world economy is now likely to contract by 1 percent this year,” said London-based Goldman economist Binit Patel. On March 5 Goldman lowered its 2009 outlook for world gross domestic product to a drop of 0.6 percent from a 0.2 percent decline.
Finance ministers from around the world are meeting near London today and tomorrow to find a way to battle the world recession. Governments have pumped billions of dollars into financial systems to prop up banks and other industries after the worldwide credit squeeze stifled growth.
I always thought that where one country shrinks another grows…
so where’s the money flowing if an economy is shrinking? Does it just mean credit is contracting and there is 1%less money and credit, or that people are consuming 1% as much, or that we are producing 1% less than we are consuming? or just producing 1% less regardless of how much we are consuming?
The last is probable….we are also consuming less which may mean we will see inventory pile up. As for the money it is probably just sitting idle in money markets….