As has been made obvious over the past few months, 2010 has already had its fair share of disasters. Between the earthquakes in both Haiti and Chile, the Icelandic volcano eruption and the recent Louisiana oil spill, the events of this year are already wreaking havoc on the global population as well as the environment.
Of course, it hasn’t been lost on us that these unfortunate occurences have also taken their toll on the world’s economy. Before the year started, it appeared as if there was a slow build towards recovery from the recession taking place throughout the globe. With the recent disasters, however, comes a major hindrance to the rebuilding process.
As reported earlier today by the QMI Agency, the recent string of tragic events is causing great disruption to the global economy. According to TD economist Martin Schwerdtfeger: “Compared with a few months ago, all of these events have imposed increased risk on global growth. A few months ago the economies were holding pace very soundly.”
The report goes on to reveal that a number of European countries are experiencing a debt crisis that is severely impacting the overall development of the global economy. The financial situation of Greece is especially of great concern. Economists fear that other European nations such as Spain, Italy, Portugal and Ireland may soon follow suit with their own problems with national debt.
Sadly, it appears as if things continue in the negative direction that they have been going in for these nations, the world will have another economic disaster on its hands. As the chief investment officer at BMO Harris Private Bank, Paul Taylor put it: “It could be the real monkey wrench in the works. We are very nervous to see people rioting on the streets of Greece and hope for a happy outcome. If not all bets are off.”
Naturally, the massive cloud of volcanic ash produced by last month’s eruption in Iceland continues to decimate the travel industry in Europe. According to the QMI report, this disaster has likely cost the aviation industry in Europe billions of dollars in lost revenue, not to mention the damage that is being done to businesses that are unable to export their goods.
In addition, “the massive oil spill in the Gulf of Mexico may also have an affect on the U.S. economy, with tourism and fishing industries particularly hard hit. The cost to the fishing industry in Louisiana is pegged at $2.5 billion US, while the Florida tourism industry could lose $3 billion US, according to Sanford Bernstein figures.”
And while Canada has been safe and sound from major environmental tragedy this year, it does not mean that the nation’s economy is immune from detriment. With the global economy taking yet another hit, the possibility of nations decreasing their need for Canadian commodities could soon impact Canada’s impressive financial growth. We all hope, obviously, that this is a disaster that can be avoided.