There are now 332 less billionaires in the world and, on average, each billionaire has lost almost a quarter of their (financial) wealth over the past few months. Of the 793 billionaires remaining, 55 live in New York, 28 in London, and 27 in Moscow. The heart bleeds.

The latest prediction from the World Bank is that the world economy will shrink for the first time since WWII.

Australia, our main trading partner, has finally run out of steam with their economy contracting by 0.5% in the latest quarter.

The news out of the US remains bad, with unemployment up around the 8% mark and heading higher.

Europe appears to be bearing the brunt of the storm, with the UK really struggling and Germany, the biggest economy in the EU, being asked to step into the fray to “save” Europe.

Meanwhile in Asia, the engines of growth are misfiring as few in the West are willing, or able, to buy their stuff. Further, as the Japanese have found, it is going to take some persuasion to change a ‘savings culture’ into one of spending.

Officials are doing their darndest to work through the crisis. The amounts being promulgated to stimulate economies are mind boggling. Money is basically free – if you can get it – and more is being pumped in, daily it appears. World leaders are doing their best to remain upbeat, reminding us that they will do whatever it takes for as long as it takes to tackle the global crises. It seems though that each round of bad news reignites the cycle of gloom.

As we have said many times before, don’t expect a quick fix. There are going to be ongoing repercussions with maybe a few more skeletons to appear. The world’s economies are clearly in for a bumpy ride at least for the next 18 to 24 months (and that’s probably a best-case scenario).

However, New Zealand businesses, officials, advisors and the Government needs to get beyond this frame of mind – because if we do things the right way, we should come out the other side in a better position to benefit from whatever recovery occurs.

 - reprinted from the March 2009 BERL Forecasts