Citing geopolitical tensions and trade standoffs, the International Monetary Fund downgraded its World Economic Outlook for 2019 to 3% (down from 3.2%), and to 3.4% from 3.5% for 2020. These five economies (China, Hong Kong, Germany, Italy, and the United Kingdom) are at risk of recession. It won’t take much to push them over the edge.
These five countries are at risk of recession
Why: The US-China trade war has continued to take its toll on the Chinese economy, with the International Monetary Fund forecasting 5.8% growth for China in 2020 – down from 6.9% in 2015, 6.7% in 2016, 6.8% in 2017, 6.6% in 2018, and 6.1% in 2019.
- Hong Kong
Why: Following almost 5 months of anti-government protests, the Asian financial hub has fallen into recession and is unlikely to achieve any growth this year.
- The United Kingdom
Why: With its ongoing uncertainty over leaving the EU (and still no end in sight), has watched its economy recently shrink for the first time since 2012, and a no-deal Brexit could well slide it into a recession.
Why: While the Italian economy fell into a recession in the final 3 months of 2018, it managed to dig itself out earlier this year. But, with mounting debt, high unemployment, weak productivity, and political turmoil, the country has been dubbed Europe’s “economic rot”.
Why: The Deutsche Bundesbank warned the country’s economy may have shrunk for its 2nd consecutive 3-month period, which would mean the eurozone’s biggest economy has entered its first recession in 6 years. The German economy declined 0.1%t in the three months to June — meaning it’s officially in recession.
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