1991 recession

The recession of the early 1990s describes the period of economic downturn affecting much of the world in the early 1990s.

The Progressive Conservative government of Brian Mulroney in Canada and the successful election campaign of George H. W. Bush in the United States may have been aided by the brief recovery of 1988. However, neither leader could hold on to power through the last part of the recession; being challenged by political opponents running on pledges to restore the economy to health. Bush initially enjoyed great popularity after the successful Persian Gulf War but this soon wore off as the recession worsened; his 1992 re-election bid was particularly hampered by his 1990 decision to renege on his "Read my lips: no new taxes" pledge during his first campaign in 1988. Mulroney retired as prime minister and party leader in 1993, and the Progressive Conservatives collapsed in the election held later that year winning only two seats.

In Australia, Paul Keating (then Treasurer of Australia, and future Prime Minister), referred to it as "the recession that Australia had to have." This quote became a cornerstone of the opposition Liberal Party's campaign during the 1993 election, designed to underscore alleged mismanagement of the national economy by the incumbent Labor Party. Unlike the opposition parties in North America, however, the Liberal Party failed to enter government.

In neighboring New Zealand, the recession came after the re-election of the reformist Lange Labour government. The impact of economic reforms (known as Rogernomics) in the recession led to deep policy divisions between the Prime Minister, David Lange, and the Minister of Finance, Roger Douglas. In response to the recession, Douglas wanted to increase the pace of reform, whereas Lange sought to prevent further reform. Douglas resigned from Cabinet in 1988, but was re-appointed to Cabinet in 1989, prompting Lange to resign. Labour lost the 1990 general elections by a landslide to the National Party, who continued with Douglas' reforms.

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