Economists predict that certain factors such as the coronavirus will lead the global economy to have its lowest level of growth since the Great Recession. GDP growth is currently predicted to be around 2.8%, which would be the first year to come in under 3% since the financial crisis in 2009. GDP growth in China alone is expected to drop .7% due to the impacts of the virus such as decrease in trade and tourism. Other Asian countries are also expected to see a decline because of the dramatic drop in tourism that is currently being seen. Some of the key factors that are predicted to decrease GDP and growth besides the coronavirus include the U.S.-China trade war, political uncertainty, and weakness in Japan and certain South American countries. The upcoming U.S. presidential election also casts uncertainty for the end of 2020, as their trade war with China could greatly change under democratic leadership. Despite the hit to global economic growth, economist do not see a recession occurring as a result of this.
Do you agree with the prediction that a recession is unlikely in the upcoming future or do you believe that it is still possible due to the current and future struggles of the global economy?
https://www.cnbc.com/2020/02/27/worlds-economic-growth-could-be-worst-since-financial-crisis-bank-of-america-says.html
4 comments:
I think that given the political and economic climate the we currently face, a recession Is bound to hit at some point, but not in the near future. Although the possibility is always lingering, it is quite low. There has been a great deal of growth and low levels of unemployment over the past few years, but aided with the virus and uncertainty in the election, especially given that the virus is now making its way into more European, middle eastern and south asian countries, it makes it hard to predict when it would hit, if it did. Declining growth abroad and trade conflicts to pose a risk to a recession, however China's economy is showing mild signs of growth, which is a positive indicator that some of the recent events are finally faced with some sort of a solution. This makes it possible for economic deceleration, rather than a full blown recession.
I do agree that a recession for the global economy is unlikely in the near future. The world has been faced with a lot of tests, as the article addresses. There may be some recessions in economies that have taken the brunt of these circumstances. I agree that there will probably be a deceleration instead of recession, that has already begun as these numbers in the article shows.
It's probably likely the economies is going to suffer for a while because of the virus and other factors like trade wars. But, I don't think there is going to be a big recession like in 2008. I think economies will suffer a bit and they will recover from it once the virus is gone. But, right now, the stock market is going down too.
I wonder if the coronavirus suddenly appears to begin to fade away sooner than we think then the economy will be able to correct itself and bounce back more so than people expect.
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