Seems like the health of the world's economy might not be doing so well after all. Last week, Dow plummeted 800 points, sparking fear of recession. Germany in the last quarter reported negative growth. China's growth in industrial output fell to a 17-year low.
Now, a drop in stocks is usually followed by a dip in the economy and this has been so, since the recession that took place in 1961-62. Also, several US business economists appear sufficiently concerned about the risks of some of President Donald Trump's economic policies that they expect a recession in the US by the end of 2021.
Thirty-four per cent of economists surveyed by the National Association for Business Economics, in a report being released Monday, said they believe a slowing economy will tip into recession in 2021.
The German economy has been flat, there has been a slump in manufacturing. Discussions have been on in the German finance ministry on how to increase investment. Leaders have not done much to ready the ageing population for digitisation. German Finance Minister Olaf Scholz recently announced that it is prepared to inject 50 billion euros to fight the slump in the Euro-zone economy that is likely to worsen with Brexit.
News is simply not great all around. The trade stand-off between US and China has caused their respective economies to plunge too. Only 5 per cent predicted that a comprehensive trade deal would result, 64 per cent suggested a superficial agreement was possible and nearly 25 per cent expected nothing to be agreed upon by the two countries. Trump administration formally labelled China a currency manipulator.
Besides this, tariffs imposed by Trump admin has affected other economies like Mexico and Canada.
Germany said it is exploring other ways of boosting its economy as it fears it could shrink further. The country's otherwise flourishing auto industry that generates 5 per cent of its gross domestic product has also suffered as consumers are wary of buying new cars.
