Report on all CIMA insurance markets 2008 financial year A – INTERNATIONAL ECONOMIC ENVIRONMENT The disturbances that began to be felt in the US financial markets in the summer of 2007 (subprime crisis) turned into a real global financial crisis in the fall of 2008: the credit markets tightened; the stock markets plummeted and a series of insolvencies threatened the entire international financial system. Massive injections of liquidity by central banks and various remedial measures introduced by governments have initially proved to be ineffective in containing the crisis. Tensions in the financial markets were first exacerbated by the troubles of Bear Stearns and, above all, by the bankruptcy of Lehman Brothers in September. Against this backdrop of exceptional uncertainty, global growth in the global economy fell from 4.9% in 2007 to 3.9% in 2008. This weak growth is mainly driven by developing and emerging countries, in particular China and India, which are not spared the global slowdown and inflation. Gross domestic products (GDP) of emerging and developing economies rose from 7.8% in 2007 to 6.1% in 2008. Chinese growth slowed sharply from 11.4% in 2007 to 9% in 2008 , the lowest level reached for seven (7) years. As for India, after five (5) consecutive years of growth, 2008 marks a slowdown with a GDP which went from 9.35% in 2007 to 7.9% in 2008. The euro zone also recorded a decline from 2.6% in 2007 to 0.8% in 2008. Several countries have entered into recession, notably Germany (1.3% against 2.5% in 2007), the ” Spain (1.2% vs. 3.8% in 2007), France (0.4% vs. 1.9% in 2007), Italy (-1% against 1.5% in 2007) or the United Kingdom (0.7% against 3.1% in 2007). African countries have not been spared from the crisis either. The growth rate of the African economy went from 7.8% in 2007 to around 6.2% in 2008. Economic growth in sub-Saharan Africa also declined in 2008 for to stand at 5.5%, against 6.8% in 2007. This deterioration in the macroeconomic situation is due to the opposing forces constituted by soaring food and fuel prices which are behind the so-called hunger riots in several countries, the slowdown in global growth and global financial turmoil. While growth has declined in sub-Saharan Africa, growth in African member countries of the Franc Zone stabilized in 2008 at 3.9% compared to 3.5% in 2007. This resilience to the crisis is the result of low international exposure to local financial systems, strong improvement in the terms of trade and good food crops.
