Abstract
Present-day world economy appears to be facing some serious challenges in sustaining its past robust growth. The credit crunch in the United States of America, as well as the United States dollar decline and high oil prices represent massive threats for the world economic equilibrium.
With this in mind, the year 2008 looks uncertain in terms of global performance. Even though European economies have proved surprisingly resilient in the face on an American recession, France shows some difficulties to cope with this general slowdown.
In this dossier, we will try to understand what are the past, future and present-day factors responsible for the recent French economic situation. These elements can be found in both the international and domestic environment. In a second part we will present the analysis of the real and monetary fields.
In 2007, three main crises have hit the global economy. The biggest one is the U.S. subprime mortgage market that then spread over other markets. There is also the real-estate crisis, especially in the US and in the UK, involving a decline in residential investment and spreading over Europe and Asia markets too. The third one is the higher energy prices and weaker house prices that dampen consumption spending.
However, in 2007, the world GDP growth was 4.9 %, which is still good.
We are going to analyze whether those crises are likely to impact stronger the world economy in 2008.
The chart below shows the world economy growth since 1999 and it points out its slowdown since 2007. The Société Générale expects a dip in 2008.
