In Depth: Is the Next Global Recession in Sight?

In Depth: Is the Next Global Recession in Sight?
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By Wang Liwei, Yu Hairong, Zeng Jia, Zhang Qi and Han Wei As the Chinese proverb says: The moon waxes only to wane, and water surges only to overflow. After nearly 10 years of steady expansion, the world economy faces growing concerns of a looming recession. There are plenty of reasons to worry as major economies including those of China, Britain and Germany are struggling with downward pressures or entering a contraction, underlining mounting uncertainties in a world rattled by growing protectionism and mounting trade barriers. Analysts say the question is not whether there will be another recession, but when. Economists often define a global recession as when global annual growth falls below 2.5%. For a single economy, contraction that lasts two consecutive quarters is seen as an indicator of recession. Under such a standard, the world has suffered four waves of recession every eight to nine years since 1975. The International Monetary Fund (IMF) in July predicted the global economy would grow 3.2% in 2019, well above the recession redline. But some alarming signs have appeared. In the United States, which accounts 24% of global GDP, a sharp drop for long-term Treasury yields sparked fears that the good days are heading to an end after the economy enjoyed 40 straight quarters of growth through the end of June. 1 On Aug. 14, the yield on the 10-year Treasury temporarily fell below the yield on the 2-year Treasury for the first time since 2007, a phenomenon known as an […]

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