Yahoo Finance 5 countries on the brink of recession right now
Earlier this month, the International Monetary Fund projected that the global economy would grow at its slowest pace since the global financial crisis.
The IMF downgraded its World Economic Outlook for 2019 to 3 per cent (down from 3.2 per cent), and to 3.4 per cent from 3.5 per cent for 2020, citing trade standoffs and geopolitical tensions.
And while the IMF also downgraded its forecast for the Australian economy in 2020 to 2.3 per cent (down from 2.7 per cent), leading independent economist Stephen Koukoulas told Yahoo Finance we won’t be heading for a recession.
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“I think the IMF reports reflect the gentle upturn in the economy, when we look at things like infrastructure, spending, mining, export volumes – they’re all doing really well, and that’s why we’re not going to have a recession.”
Koukoulas said the economy wouldn’t be strong, but the growth in capital, mining, infrastructure, and exports would mean the economy would avoid “catastrophe”.
But reports show these five countries might not:
China
The trade war has continued to take its toll on China’s economy, with the IMF forecasting 5.8 per cent growth for the world’s second-largest economy in 2020 – down from 6.6 per cent in 2018 and 6.1 per cent in 2019.
Hong Kong
Hong Kong’s financial secretary, Paul Chan, said the effects of the protests on the economy had been “comprehensive,” and that preliminary estimates for third-quarter GDP, to be revealed on Thursday, would show two successive quarters of contraction, which is the technical definition of a recession.
The UK
Turmoil caused by Brexit uncertainty has seen the United Kingdom’s economy shrink for the first time since 2012. GDP for the three months to June contracted by 0.2 per cent compared to the previous quarter, and the pound has continued to drop.
The UK Office of Budget Responsibility warned leaving the Europen Union without a deal would deter investment, and higher trade barriers would hurt exports.
Germany
The EU’s largest economy is facing some serious economic woes: its manufacturing industry is weak, and according to global research company, IHS Markit, a technical recession “now looks to be all but confirmed”.
Italy
While Italy’s economy fell into a recession in the final three months of 2018, it managed to dig itself out earlier this year.
But, with weak productivity, high unemployment, mounting debt and political turmoil, the country has been dubbed Europe’s “economic rot”.
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