According to the latest World Economic Outlook published by International Monetary Fund (IMF, 20), the world output (income) grew at the rate of 3 percent in 2008, which declined to -0.6 percent in the very next year. The decline in the output began from the last quarter of 2008 since when the subprime crisis surfaced in the US causing enormous panic amongst the major players in the financial market. The United States witnessed a sharp deterioration in its economic growth from 0.4 percent in 2008 to -2.4 percent in 2009. With a significant stake in the global economy, what has been the source of its ailments had unfortunately transmitted to the rest of the world causing a worldwide recession. However, the recent reports suggest that the global economy has recovered faster than anticipated, clocking a growth rate of 1.7 percent in the last quarter of 2009. It is projected that the growth rate in 2010 will substantially improve to 4.2 percent, with the US is expected to grow at the rate of 3.1 percent during the same period. The deceleration noticed in the global output has been a major worry for both political and economic policymakers across the globe. So much so, concerted efforts were made to ward off the ill-effects, a major point that will be addressed in the latter part of the essay.Coming to the story of New Zealand, the country recorded a negative growth of -0.1 percent even in 2008, and with the decline in the global output, its growth rate went down further to -1.6 percent. As it may be noticed in Chart 1, the growth rate of New Land somehow moved in tandem with global output, particularly in the recent years. Thus, any business enterprise located in New Zealand has to worry about their market prospects, depending upon in what direction the global output was moving. More so, these enterprises need to surely bother about the recovery process of the global economy too.The above narratives brought out the disquieting trend with respect to world output and national income.
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