So far we are the following the track of early 1990's...but to my opinion, this time it could be a little bit worse.
Why worse? well in 1990, the US, UK and most emerging markets had a mild recession and resume their growth pretty fast, the banking system was untouched and globalization was in full force.
Today we have a global financial system that is kept artificially alive, the world trade has collapsed and industrial confidence has been broken. On top of that, we have a globalization of economical issues not to speak of the complexity of the current economical environment.
Coming back to the 1990's comparison, Statistics Finland has recently a pretty good article showing the state of the economy and made a clear comparison with this period, here is what they had to say:
GDP grew by 0.9 per cent in 2008. Seasonally adjusted GDP was at its highest level in the first quarter of 2008, after which it has fallen at an accelerating pace. Finland’s economy is currently diving as quickly as it did in the early 1990s when the biggest single drop in GDP, which occurred in the first quarter of 1991, was also -2.7 per cent (compared with the quarter before). The biggest year-on-year drop in the 1990s was -8.0 during the last quarter of 1991.Finland is doing a little bit worse than its European counterpart. What can you expect from an export oriented economy, when the world trade suddenly come to a standstill.
Finland’s economy is currently also contracting slightly faster than the economy of the EU area taken as a whole. According to preliminary data compiled by Eurostat, the GDP of the EU area contracted during the first quarter by 2.4 per cent from the previous quarter.
Unfortunately, it is not like in 1992-93 when the country could devaluate it's currency in order to kick start its export - the Euro is hurting badly since too strong agains a sinking dollar and against major emerging market that have pegged their currency directly or indirectly to the dollar.
Now Finland is in a state of economical emergency should the global economy doesn't stabilize as predicted by the oracles- the one who couldn't foresee the impact of years of unsustainable debt accumulation as well as history of financial greed.
It really needs an urgent review of its internal economical architecture, far too reliant on export and too much on unsustainable internally debt-fueled consumptions- as if the 1990's lesson were not learned.
Ok, that's enough of