Economies across the world are suffering and experts believe that if the situation does not improve then we may be heading towards a global recession in the coming year. MM International offers an insight on the current scenario.
“It’s a recession when your neighbor loses his job; it’s a depression when you lose your own,” quotes Harry S. Truman. Industry experts are raising the red flag and warning the world of an upcoming recession in 2020. According to a report by the United Nation’s trade and development body, UNCTAD, recession in 2020 is now a clear and present danger. It adds that the signs can be seen around trade tensions, currency movements, corporate debt, a no-deal Brexit and inverted yield curves. The report further predicts global growth to plunge to 2.3 % in 2019 as compared to 3 % in 2018.
The next Great Depression
The last major global recession was witnessed during the late 2000s and early 2010s. It was claimed to be the most severe economic and financial meltdown since the Great Depression by the International Monetary Fund (IMF) and we now seem to be heading towards another one.
Statistics from the Organisation for Economic Co-operation and Development for the Q4 2018, Q1 2019 and Q2 2019 show poorly performing economies for both emerging as well as developed economies (Figure 1).
Countries to watch out for ...
A report by Forbes magazine has listed out a few countries that are on the edge of entering a recession in 2020. The top three countries included the UK, Germany and Italy.
The UK: The unending Brexit drama and the uncertainty of how the UK will exit from the European Union have adversely affected its economy in Q2 2019 (As shown in Fig.1). In the coming days, if the UK opts to leave the EU without a deal then there are many possibilities that the country would be staring at a recession.
Germany: Germany is one of the largest economies in the European Union and the country could well be heading towards its first recession in more than six years. The country recorded its biggest annual decline in nine years in industrial production owing to the escalating trade war between the US and China.
Italy: Italy is another large economy in the EU and things are not looking for the country. Italy has witnessed a continuous downfall in its GDP since the second half of 2018 and till date is not showing any signs of progress.
The overall global scenario is a worrying situation and it’s high time that the leaders around the world take the required measures and policies to curtail the impact of a possible global recession.