1. Since August-September 2008 a new stage of the global crisis has begun. NPL and bad assets of the financial sector led to the “trust crisis” at the financial markets, which resulted in credit rationing and finally led to second crunch at the stock markets (Lehmann Brothers bankruptcy became the symbol of the new stage of the crisis).
2. After almost one year of the financial system contagion, the crisis began to propagate to the real sector of the economy.
3. In September-November 2008 the measures of the central banks and governments were intensified in order to prevent the recession in the real sector.
4. However, majority of the developed countries stepped into the recession rather rapidly. At this stage their demand was reducing because of the investments and consumption of luxury goods. The latter provided also diminishing trade between developed countries. 5.Correspondingly the demand in developed countries for raw goods (mainly from emerging countries) dropped as well, which led to a rapid decrease of the prices for raw goods.
6. In November-December the monetary policy in majority of developed countries were softened radically, which led to the discussion about the liquidity trap.
7. Decrease in employment during November-December led to further substantially decrease of the demand mainly due to the consumption, which made the recession unavoidable.
8. Since the end of 2008 developed countries faced with deflationary pressure, due to the reduction of the aggregate demand.
However, at this stage the trends between developed countries and developed ones seems to be divergent.
During last years majority of emerging economies operated under the substantial deficit of current account of the balance of payments. In condition of high liquidity investments and borrowings from abroad allowed to finance the deficit.
Another group of the emerging and transitional countries rich with natural resources provided positive current account basing just on trade with these resources.
Both groups faced with: (i) decrease of external demand for both commodities and natural resources, (ii) huge decrease of prices for natural resources, (iii) extremely rigid access to foreign borrowing.
Thus all developing countries faced with the pressure on their exchange rates and had to depreciate it (those with the flexible forms of exchange rates).
Countries with any form of the pegs, could not but have to devalue their currencies immediately (Belarus, Kazakhstan). However, depreciation of the national currency leads to the inflationary pressure for the developing countries. Thus, they face at the same time with reducing demand and deflationary pressure because of it, but inflationary pressure because of the external disequilibrium.
Finally, majority of developing countries will face with recession under inflationary pressure as the total effect.