Is the Global Economy Headed Towards a Recession?

Posted Thursday, September 26, 2019 by
Arslan Butt • 1 min read

According to a recent report on trade and development by the UN, a global recession is a very real possibility in 2020 as economic growth slows down in both advanced as well as developing nations. Escalating trade tensions, Brexit uncertainties, currency gyrations and changes in long-term interest rates were listed as some of the leading indicators signaling a possible upcoming recession.

According to the Unctad report, ““A spluttering north, a general slowdown in the south and rising levels of debt everywhere are hanging over the global economy: these combined with increased market volatility, a fractured multilateral system and mounting uncertainty, are framing the immediate policy challenge.”

Unctad estimates global economic growth to decline to 2.3% in 2019 from 3% in 2018, which is the weakest level of economic growth seen since the financial crisis back in 2009. Multiple emerging countries are already in recession while leading economies like the UK and Germany are nearing recession.

Trump’s trade wars and weakening global demand are expected to cause a steep decline in trade growth in 2019. Meanwhile, negative interest rates and quantitative easing measures continue even though they have shown little impact despite being around since the last financial crisis.

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