What started as problems for companies specialising in subprime mortgages has spread to other parts of the financial sector – also outside the USA – and is now dampening output and employment. This again has a negative impact on financial enterprises.
The current assessment is that the USA is heading for a recession that will not subside until the 2nd half of 2008 at the earliest. Then the situation – at best – will only slowly improve. It looks as if Europe will avoid actual recession, but must be prepared for modest growth rates of between 1 and 2 per cent in the coming years.