Page last updated at 16:16 GMT, Thursday, 24 September 2009 17:16 UK

G20: Economic summit snapshot

The leaders of the Group of 20, or G20, of the world's most powerful countries are meeting in the US city of Pittsburgh, to discuss the global economic crisis and measures which have been taken to deal with the crisis and prevent similar crises in the future.

G20 countries

Map of the world highlighting the G20 nations Map of the world showing G7 nations

Click on the links below to find out more about the economic challenges faced by member states and what signs of recovery are starting to appear.


One of South America's largest economies, Argentina was in economic difficulties even before the global downturn struck.

Cristina Fernandez

Expansionary policies had caused the economy to overheat, fuelling inflation, while tax revenues shrank because the country's farm exports were fetching lower prices on world markets.

The government responded to the fall in tax revenues by increasing taxation on agricultural exports, a move that sparked continuing protests by farmers.

President Cristina Fernandez, who came to power in December 2007, nationalised the private pension system in November last year to help plug the hole in the government's finances.

But the row over taxation gave the government a confrontational image that contributed to its defeat in congressional mid-term elections in June.

Previously privatised companies such as Aerolineas Argentinas have also returned to state control.


Australia has experienced a long period of stable economic growth since its last recession in 1991, benefiting from the rise of China and India as markets for its raw materials.

Australian Prime Minister Kevin Rudd

However, its resources-based economy has struggled since the worldwide financial turmoil began in the middle of 2008.

Its mining firms are cutting back on capital spending, reducing staff numbers and mothballing projects.

In February, the government of Prime Minister Kevin Rudd announced a 42bn Australian dollar ($26.5bn; £19bn) stimulus plan, to try to shield the country from the global downturn, and Australia has been one of the few developed countries to avoid slipping into recession.

The Australian economy grew by 0.6% in the three months to the end of June, following growth of 0.4% in the first quarter of 2009. The economy had contracted by 0.5% between October and December of last year.

But despite its efforts, the government has warned that the unemployment rate could hit 8.5% by mid-2011.


It was confirmed this month that Latin America's biggest economy has exited recession after it expanded by 1.9% in the second quarter.

Brazilian President Luiz Inacio Lula da Silva

The return to growth means that Brazil's recession was comparatively short, amounting to just two quarters of negative growth.

Foreign investors have been putting money into Brazil recently in the hope that its economy would recover more quickly than other countries.

The Ibovespa stock market index has been reaching levels not seen since before the global financial crisis.

Brazilian President Luiz Inacio Lula da Silva has argued that developed countries should not turn to protectionism, and has pushed for a greater role for developing countries in the world economy.

This week's G20 summit in the US is expected to call for major reforms to promote a more balanced global economy, which would see countries in Europe and the US save more, while fast-growing countries such as India and China would spend more to boost global growth.

However Brazil has said it does not agree with the proposal, calling it "obscure".

Brazil has also said it will offer $10bn in financing to the International Monetary Fund to help improve the availability of credit in developing countries.


Thanks to the North American Free Trade Agreement (Nafta), Canada's economic health is closely linked to that of the US, which buys three-quarters of its exports.

Canadian Prime Minister Stephen Harper

The ailing car industry, for instance, is as big a problem for Ottawa as it is for Washington. As a result, Canada has copied many of the US government's tactics, such as cutting interest rates and drawing up stimulus packages, although with the same lack of success.

However, Canada's banking sector and housing market are in better shape than in the US, with far fewer sub-prime mortgages.

In February, the Canadian parliament passed a 40bn Canadian dollar ($32bn; £23bn) economic stimulus package as part of the country's annual budget.

But it did not stop the economy contracting at the fastest rate since 1991 in the first three months of 2009.

The economy shrank by 5.4% on an annualised basis during the quarter, though this was better than expected.


The global downturn failed to prevent China overtaking Germany as the world's third-largest economy.

Premier Wen Jiabao

In fact, China's economy has shown signs of improvement recently, with the Asian Development Bank raising its growth forecast for the country for 2009 and 2010.

And annual growth rates of both industrial output and retail sales rise in July, and foreign investment increased in August.

But the downturn has had serious consequences for the country. Its banks have not felt the impact seen elsewhere, but ordinary people have - with migrant workers especially hard hit.

Chinese exports have been hit hard by falling world demand, with millions of rural migrants returning to their villages after the factories that employed them closed down.

While China's growth remains relatively strong compared with other countries, it has launched a $587bn stimulus package and has underlined that it now has the largest deficit in 20 years.

At September's UN climate change summit in New York, President Hu Jintao marked a change in the country's climate change policy when he pledged to improve energy efficiency and curb the rise in China's carbon dioxide emissions.


France became one of the first European countries to exit recession, together with Germany, when official data showed the French economy grew by 0.3% between April and June.

Finance and Economy Minister Christine Lagarde called the data "surprising", but said consumer spending and strong exports had helped boost GDP.

President Nicolas Sarkozy

Unlike most other G20 countries, France had seen social unrest in response to the global downturn, with millions of workers taking industrial action at the beginning of the year in protest at the government's handling of the economic crisis.

In February, the government announced a 26bn-euro ($33.1bn; £23.5bn) initiative designed to revitalise the economy.

France has pushed hard for tougher financial regulation. The G20 agreement, signed in April, provides for stricter controls on bankers' pay and bonuses, more regulation of hedge funds and ratings agencies, and sanctions against tax havens.

At the time, President Nicolas Sarkozy said the deal went "well beyond what we had imagined".

But since then, France has played a leading role in the European Union's proposed Alternative Investment Funds Directive - aimed at further regulation of hedge funds, private equity and other alternative investment funds - putting it at odds with the UK and the US, who are wary of imposing overly-stringent rules.


Like France, Germany is no longer in recession, after surprise GDP data showed the economy grew by 0.3% in the second quarter.

The Federal Statistics Office said that household and government expenditure had boosted growth, adding that imports has declined far more sharply than exports.

Earlier this year, the government had forecast the German economy, which accounts for about a third of eurozone output, would shrink by 6% in 2009. That would be by far its worst performance in the post-World War II era.

Chancellor Angela Merkel

In February, the country approved a 50bn-euro ($63bn, £44bn) stimulus plan, and Chancellor Angela Merkel said Germany would emerge from the economic crisis stronger than when it entered it.

Germany also launched a car scrappage scheme in February - in which drivers receive a cash incentive to scrap their old car and buy a new one - to boost the ailing car industry.

The scheme has been widely deemed a success, with more than 1.7 million applications received so far.

Along with France, Germany has also been calling for more regulation of financial markets and was a key player in the EU's proposed Alternative Investment Funds Directive.


The Indian government under Prime Minister Manmohan Singh is well placed to embark on economic changes, having won a new term with a strong margin in May.

In July's budget, Finance Minister Pranab Mukherjee said the government's "first challenge" would be to return to a growth rate of 9% a year "at the earliest".

Prime Minister Manmohan Singh

The Indian economy grew 6.7% in the year to the end of March 2009, but had grown by an average of 8.8% in the previous five years.

Agriculture, which makes up about a fifth of the economy, was one of the sectors to see growth fall, while industrial firms such as Tata have been severely affected by the freeze in world credit markets and a general fall in global spending.

In the budget, the government also increased spending on urban poor schemes and the jobs-for-work scheme to help the poor.

Although India's economy has undoubtedly been affected by the global recession, Prime Minister Singh has said he has no intention of going to the IMF for help - an institution he partly blamed for the economic downturn, saying it had conducted "too little surveillance of the affairs of the developed countries".

Mr Singh has also shared France and Germany's concern for greater regulation of financial markets.

He has said he is happy that his country has been admitted to two key standard-setting bodies.

"India has now been made a fully-fledged member of the Financial Stability Forum [and] also the Basel Banking Committee. This from India's point of view is a plus factor," he said.


Globalisation has been a significant economic benefit for Indonesia in recent years.

Thanks in no small part to a big growth in manufacturing facilities for major multinationals, its economy grew 6.1% in 2008.

President Susilo Bambang Yudhoyono

However, with Western firms cutting back production towards the end of the year, Indonesia's exports dropped sharply in the final three months of the year.

To help lift the economy, the government of President Susilo Bambang Yudhoyono has passed a $6bn (£4.3bn) fiscal stimulus.

But with overseas debts estimated at $151.7bn, the government has its own financial woes.

And critics say it is not doing enough to stamp out corruption that continues to deter some would-be investors.

In July, the country was also rocked by deadly blasts at two hotels in the capital Jakarta, leaving many worried about the impact this would have on Indonesia's reputation, especially among foreign investors and tourists.


The Italian economy, the third-largest in the eurozone, was one of the first to enter recession.

Prime Minister Silvio Berlusconi

Its economy has now shrunk for five quarters in succession, although the 0.5% contraction in the second quarter was smaller than expected and much smaller than the 2.7% contraction seen in the first quarter.

The latest figures have raised hopes that the country's recession may be easing.

Italy was also one of the first to approve a stimulus programme. In November, the government of Prime Minister Silvio Berlusconi approved an 80bn euro ($102bn; £66bn) emergency package that included tax breaks for poorer families, public works projects and mortgage relief.

Italy has the world's third-highest debt burden, expected to top 110% of GDP this year.


Japan is one of only two G20 members to have had a change of leadership since the London summit - the other being South Africa.

New Prime Minister Yukio Hatoyama promised economic revival and strong US ties just hours after emerging victorious in September's election.

Prime Minister Yukio Hatoyama

The world's second biggest economy will now be led by an untested government, after Mr Hatoyama's Democratic Party ended 50 years of almost unbroken Liberal Democratic Party rule.

Japan followed fellow G20 members Germany and France out of recession, when it was confirmed that its economy grew by 0.9% in the second quarter.

But many analysts say the rise was due to a $260bn (£159bn) government stimulus package, and are uncertain as to how long growth will continue for.

The slowdown in the economy was steeper than that being experienced in the US or Europe, as Japan has been hit particularly hard by falling global demand for its products, particularly electronic equipment and cars.

Consumers have cut back too, alarmed by rising unemployment. And its exports plunged in the first half of the year.

Japanese banks were hit hard by declines last year in the stock market, as they own stakes in many companies to strengthen business ties. But as the stock market recovers, banks hope for an upturn in their fortunes.


The Mexican economy is so intertwined with that of the US that when Wall Street sneezes, Mexican firms can find themselves in intensive care.

President Felipe Calderon

About 80% of Mexico's exports go the US, leaving the country vulnerable to falling US demand.

Mexico also thrives on remittances from workers who have migrated to the US, but these have fallen for the first time since records began in 1995.

The outbreak of swine flu has hit the country's tourism industry hard and also led to some countries banning imports of pork products or pigs from Mexico, despite experts saying the virus cannot be caught from eating pork.

The finance ministry has warned that the flu could cost the country's economy more than $2bn.


Russian President Dmitry Medvedev said he was content with the results of the G20 summit in April and that it represented a "step in the right direction", according to Russian news agency Itar-Tass.

Russia's economy is reeling from the effect of a sharp fall in the price of oil.

President Dmitry Medvedev

The economy shrank at an annualised pace of 10.9% in the three months to 30 June but compared with the first quarter it expanded 7.5%.

Social unrest has already broken out in Vladivostok, while the financial crisis has cut the combined fortune of the 10 richest Russians by 66% to $75.9bn, according to business magazine Finans.

Overseas investment in the country is also being deterred by the perception that state-run firms bully or intimidate foreign companies into handing over control of their investments.

There is also widespread cynicism as to how much President Dmitry Medvedev is really in control, and whether power really lies with Prime Minister and former President Vladimir Putin.


The Saudi kingdom is the only G20 country that also belongs to oil producers' cartel Opec (Indonesia allowed its membership to lapse at the end of 2008).

Saudi King Abdullah

The global downturn has led to lower demand for energy, further depressing world oil prices, despite Opec's attempts to cut output.

When oil prices were at their peak, Saudi Arabia was making $1bn a day. That figure now stands at about $700m.

As a result, the International Monetary Fund predicts that Saudi Arabia and its neighbours will record fiscal deficits of up to 3.1% of GDP in 2009, a marked decline from surpluses of 22.8% of GDP in 2008.


Following May's elections, Jacob Zuma replaced Kgalema Motlanthe as president and pledged to bring down "unacceptably high" levels of unemployment and create half a million jobs this year.

President Jacob Zuma

Mr Zuma's ANC party has also said it will make fighting poverty a priority. It has promised a Canadian-styled National Health Insurance System, a "food for all" scheme, more child grants to poor families, and universal access to water and sanitation by the time of the next election.

South Africa has the continent's biggest economy and is the only African member of the G20.

The country has said it is facing its worst recession in 17 years. Its economy shrank 3% in the second quarter following a 6.4% contraction in the first three months of 2009.

Mr Zuma has said a three-year 787bn rand ($98bn; £60bn) spending programme announced in this year's budget - and including funds for schools, transport, housing and sanitation - must be properly planned.

Like Brazil, it fears that the global downturn will lead to a rise in protectionism in rich nations, making it even harder for developing countries to gain a foothold in key markets and increasing their sense of economic isolation.


The government in Seoul, like its neighbours in the region, fears that the global slowdown could lead to a repeat of the 1997-98 Asian economic crisis.

Lee Myung-bak

But the country returned to economic growth in the first half of this year.

Its economy grew by 2.3% in the second quarter, following growth of 0.1% in the first quarter and a contraction of 5.1% in the last three months of 2008.

The country's central bank has said increased government spending, help for car buyers and record low interest rates have helped boost the economy.

In November last year, the government announced a stimulus package worth 14 trillion won ($10.9bn; £6.6bn) to boost the economy, with 11 trillion won aimed at public projects and three trillion won for tax cuts to encourage spending.

But some analysts have questioned whether growth will continue, as fiscal stimulus wanes and credit expansion slows.


As it tries to revive its EU membership bid, Turkey has been talking up its response to the downturn as evidence that its reactions are those of a developed country, not an emerging market.

Tayyip Erdogan

The week before the G20 summit in Pittsburgh, Turkey's central bank cut its benchmark interest rate further in September to 7.25% even as tentative signs emerged that the country's economy is stabilising.

After contracting heavily in the first three months of the year, the Turkish economy bounced back, expanding by around 5% in the second quarter.

However, the unemployment rate remains above 13%.

Investors are waiting to see if Turkey will sign a loan deal with the IMF, after the last one expired over a year ago, although analysts are divided on whether the country needs it.


Asked what British voters would get out of the G20, Prime Minister Gordon Brown stressed the importance of countries working together to overcome the economic crisis, saying the agreement would help people in Britain and overseas.

Prime Minister Gordon Brown

He called the G20 deal a "very significant step towards recovery", saying it would help rebuild confidence in the financial system in the UK and abroad.

However, unlike France and Germany, the UK is reluctant to enforce tough regulation on hedge funds, fearing that such plans will harm the City as an international financial centre.

The International Monetary Fund expects the UK to suffer the worst contraction among advanced nations in 2009, with its economy predicted to shrink by 4.2%.

The Bank of England has already cut interest rates to just 0.5% in a bid to help the British economy out of recession, while unemployment is now almost 2.5 million - the highest level since 1995.

It has also recently added another £50bn of new money to its initial £125bn programme of quantitative easing to pump more funds into the economy by purchasing government bonds.

Troubles in the banking sector have led the government to bail out some of the country's biggest financial institutions, including Royal Bank of Scotland, in which it now holds a 68% stake.

The UK government has also followed its counterparts elsewhere in Europe and introduced a car scrappage scheme to help the ailing motor industry.


President Barack Obama said the "historic" agreements reached at the London summit could mark a "turning point" in the pursuit of economic recovery and reforming the regulatory financial system.

The global economic turmoil began in the US, thanks to the sub-prime mortgage crisis in which underperforming home loans were repackaged and sold on as toxic debt.

Barack Obama

In June, the government announced major reforms to banking regulation, in what President Obama called the biggest shake-up of the US system of financial regulation since the 1930s.

The reforms require big banks to put more money aside to cover any future losses and to curb risk taking, and give the Federal Reserve the authority to monitor major financial institutions.

They also call for global regulatory standards and more co-operation.

The Fed has cut interest rates to near zero in a bid to unfreeze the credit markets and recently suggested the worst of the recession is over.

But there are still problems in the wider economy, with the unemployment rate at 9.6%.

The car industry in the US has been battered by a global slump in demand, and both Chrysler and GM had to briefly enter Chapter 11 bankruptcy protection. Car sales have been boosted though by the introduction of a scrappage scheme.


Some European countries exited recession in the second quarter, but the EU economy as a whole is still expected to shrink by 4% in 2009.


The EU, led by Germany and France, has put forward proposals for even tighter hedge fund regulation, although the UK believes they would be anti-competitive.

Sixteen of the 27 European Union countries share the euro as their common currency. Their individual economic performances vary considerably, but the eurozone as a whole has been in recession since September 2008.

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