Major City Economies

By: EconomyWatch Content   Date: 13 April 2010

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 The major world cities economies like New York City, London, Tokyo, Dubai, etc. took a beating as a result of the adverse impacts of the global financial crisis of 2008-2009. New York City, London and Tokyo posted a GDP –PPP of $1406 billion, $565 billion and $1479 billion in 2008.

Global City Economy: London

London’s economy has performed remarkably well during the downturn, as compared to the rest of the UK. However, with the economy recovering, London may well struggle a bit in the initial stages of the upturn. Confidence continues to be low in the financial services industry, which plays a larger role in London’s economy than in the rest of the UK. The UK retail sector had an upbeat run up to Christmas, according to the British Rail Consortium (BRC). The BRC retail figures for December 2009 looked particularly strong when compared to the figures from December 2008. However, in January 2010, there has been a lull in sales. Early data indicators from Experian suggest that the VAT increase and snow has had a significant impact on shopping patterns in early 2010 with overall shopper numbers in non-food retail stores on Sunday, January 10, falling 14% as compared to the equivalent Sunday last year. The inflation in the UK rose to 2.4% from 0.3% in November 2009 due to a reduction in VAT to 15%, sharp decreases in petrol prices and heavy discounts to consumers by retailers.

Global City Economy: New York City

After Lehman Brothers collapsed and other Wall Street firms threatened to topple, the economy of the Big Apple was heading for a disaster. However, as the economy improved due to Fed bailouts of the big banks, New York City became better positioned than before to handle a large scale economic shock. The unemployment rate in NYC hit 10.6% in December 2009, well in tune with the rest of USA’s rate. According to Moody’s Economy, job losses in the metropolitan area in the next few months would amount to less than 4 % of the region’s total employment at the peak of the last boom. Mayor Michael Bloomberg pointed to factors like tourism, housing prices and office vacancy rates, which have weathered the crisis better than their Chicago or LA counterparts.

 

Major Banks like Citigroup received $45 billion in aid, JP Morgan Chase got $25 billion, and Goldman Sachs and Morgan Stanley got $10 billion each. One could argue that no other city in the US got as much Federal aid as NYC. 

 


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