Economic decline 'may not match Great Depression'

News Article - 23 May 2012
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Businesses looking to control costs during the recession may take comfort that while the economic downturn was one of the worst seen in the last century, in terms of general economic decline it is unlikely to match the Great Depression, one sector commentator has claimed.

Charles Davis, economist at the Centre for Economics and Business Research, was commenting on schools secretary Ed Balls' recent statement to the BBC that the current financial slowdown is the worst encountered in 100 years.

"I think, even in the worst case scenario, I wouldn't hope that we will see five or ten per cent falls in gross domestic product (GDP) year-on-year," Mr Davis noted.

He added that he would urge caution against the current recession being compared to something as bad as the aftermath of the First World War.

According to the Office for National Statistics, GDP contracted by 1.5 per cent in the fourth quarter of 2008, compared with a decrease of 0.6 per cent in the third quarter.

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