Weaker growth prospects for World economy:bad news for businesses and financial markets


Published On: Tuesday, February 4, 2020 | By:

Weaker growth prospects for World economy:bad news for businesses and financial markets

In 2019 Global economy narrowly escaped the finacial crisis similar to 2009.According to the International Monetary Fund’s preliminary, world GDP grew by just 2.9 per cent last year – the weakest performance since the global financial crisis in 2009 and far short of the 3.8 per cent pace of post-crisis recovery over the 2010 to 2018 period. For any economy, the key to assessing growth implications can be found in deviations from the trend – a proxy for the so-called output gap. Last year’s shortfall from trend (0.6 percentage points) brought growth uncomfortably close to the widely accepted global recession threshold of 2.5 per cent. When world output growth slips to the lower half of that range – as it did in 2019 – the risks of global recession need to be taken seriously. But “Prediction is very difficult, especially if it is about the future.”

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