Impact of the Global Financial Crisis of 2007/2008 on the Qatari Economy Impact of the Global Financial Crisis of 2007/2008 on the Qatari Economy Abstract The global financial crisis of 2007-08 had affected many countries of the world. Even the world’s leading countries, like USA, were struggling to cope with the sudden changes in the market trends…
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It will be evident from the results that Qatar was able to mitigate the effect of the global crisis to a great extent. Financial indicators don’t show much grief for the citizens. Contents Abstract 2 Introduction 4 Regional Effect of the Global Economic Crisis 5 Real GDP Growth 5 Growth and Employment 6 Commodity and Oil Prices (Inflation) 7 Returning Labor Migrants 9 Increasing Poverty Levels 10 Rising Pressure on Social Security 11 Decrease in International Assistance 12 Conclusion 13 Bibliography 14 Introduction The financial crisis that captured the many countries in 2007-08 is referred to as Global Financial Crisis. It is considered as the worst financial and economical crisis in the history after the huge recession in 1930s. It had severe consequences including bailout of governmental banks, decline in stock markets, reduction in housing market, large periods of unemployment etc. Most part of the world was captured by the major financial crisis. Even the United Arab States which are part of GCC, Gulf Cooperation Council, faced the consequences of the global economic hazards. However, Arab Countries are less prone to financial crisis as compared to lesser developed countries and they can cope with the economic turmoil. However, they have to face some part of the hazards that the whole world was suffering from (Behrendt). Qatar is the part of the GCC which enables it to utilize several benefits. Qatar is benefitted from high commodity prices and prudent management of the financial assets. Qatar was indirectly affected by the global financial crisis owing to the development of oil prices in the region. The downturn of the countries in the regions of North America, Asia and Europe eventually reflected the crisis towards the gulf countries. The growth potential of the gulf countries was severely impeded by the oil prices. Qatar was already facing some political, economic, and social challenges that increased its challenges to face the crisis. Had the crisis continued for a longer period, the employment opportunities and social security at Qatar would have been severely affected (Behrendt). This report discusses the impact of global financial crisis on various economical factors including employment opportunities and social security. Policy responses to combat the situation are discussed. The report focuses on selected aspects of the crisis in the light of statistics that reveal the impact of financial crisis during the period of 2007-08. The effects of the crisis are transmitted to the regional and country level (Behrendt). The statistics will be evaluated in the light of reasons and comparisons. The financial indicators will be pointed out in each situation to reflect on the economy of Qatar. The graphs will parallel the results from other Gulf countries to show the tough resistance of Qatar in terms of its economic stability and viability. Most of the indicators are directly or indirectly related to each other. So, if one factor is severely affected with crisis, the other areas of economy will face the dilemma also. Regional Effect of the Global Economic Crisis The effect of global economic crisis will be highlighted in terms of economic indicators that are direct measure of the country’s economic stability. Real GDP Growth The major financial crisis severely affect
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The impact of the global financial crisis is still considerable. It is causing an economic slowdown in developed and developing countries globally. Evidence shows that, the root cause of economic and financial turmoil is the selling of sub-prime mortgages by the United States mortgage market to huge numbers of consumers with inadequate incomes.
The financial crisis affected the macroeconomic aspects such as the employment, government spending, domestic and international borrowing. In addition, it resulted to the poor performance of the stock market in many countries, collapse of the local and international financial institutions as well as bailout of the banks by the governments.
The crisis cemented the notion that ‘when America sneezes, the rest of the world catches a cold.’ The contagion spread and spread fast. It required billions of dollars of infusion in the worst affected economies to prevent a complete worldwide financial and economic catastrophe.
165. 9 Mishkin, F., 2007, Monetary policy strategy, Massachusetts, MIT Press pp.243. 9 Reynolds, A., 2001, The Fiscal-Monetary Policy Mix: Cato Journal, Vol. 21, Florida: Fall. Pp. 45-67. 9 Monetary Policies for the Global Financial Crisis Introduction The United States controls most of the world’s economies, meaning that an economic crisis born there will result in the disability of the entire world.
The impact was intense. There were people had lost their homes and jobs, all stocks within the financial companies had been made worthless, it was the signal of a start over for the lives of many, who had been affected directly or indirectly. This was given several names, the common ones being The Global Financial Crisis or 2008 financial crisis.
In the years preceding the financial crisis, Americans had bestowed a high level of trust in the leading banking institutions. Esteemed customers and companies relied greatly on the reliability of the banks and had no idea that some of the big names in the banking industry would experience a downfall.
What Lessons can be learned from the Global Financial Crisis of 2007-08, About the Effectiveness of the Transmission Mechanism of Monetary Policy?
The global financial crisis, which occurred during the year 2007-2008, has been recognised as one of the worst crises ever faced by the word economy.
The reasons that had led to the Recession have been discussed in details. The key reason for the crisis was the bursting of the housing bubble in the United States. The empirical data and analysis of the factors that had led to the crisis has been covered.
The main problem ist common phenomena in a financial crisis. The fuse can be the financial products, the markets, or the institutions of any countries, currency devaluation, price slump of financial assets, stock and bond market crash, and collapse of firms. There are four types of financial crisis which include monetary, debt, banking and subprime crisis.
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