The Global Competitiveness Report 2008-2009

This year’s Global Competitiveness Report is being released at a time of multiple shocks to the global economy. The subprime mortgage crisis and the ensuing credit crunch, combined with rising inflation worldwide and the consequent slowdown in demand in many advanced economies, has engendered significant uncertainty about the short-term outlook for the world economy. Global growth is slowing, and it is not yet clear when the effects of the present crisis will subside. The financial market crisis that began in early 2007 is almost unprecedented in its impact, having resulted not only in losses in markets and for financial institu- tions, but also in an erosion of public confidence in the financial sector and among the institutions themselves across the industrialized world. In the meantime, rising energy and commodity prices are having a dual effect on emerging and developing economies: on the one hand, boosting growth; on the other hand creating infla- tionary pressures that raise the basic cost of living, thus increasing poverty levels. More generally, although the present slowdown was originally expected to be con- fined mainly to the United States, it is now spreading to other industrialized economies and it is not yet clear what the future will bring for emerging markets