Development and Finance from issue 2009/3

Gábor Karsai


- Abstract -

The third quarter of 2008 saw the world economy, including Hungary, sink into a severe and deepening financial, economic and confidence crisis. In early autumn economists broadly agreed that there was hope for a V-shaped economic crisis – a steep decline followed by a quick recovery. Later on, however, they were outnumbered by experts who reckoned that the ever-deepening global pessimism and the panicking markets meant the crisis would more likely be U-shaped, bottoming out for a long time, or even L-shaped, predicting lasting stagnation at low levels. Today the most likely scenario is a W-shaped crisis in which the bottoming out is followed by modest recovery only to fall back again (the middle of the letter W), and the time when things will brighten up is still uncertain.

Gábor Karsai, PhD, deputy CEO (GKI Economic Research Co, Hungary)

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