As the world prepares to enter 2019, pessimism reigns over the economy due to fear of continued trade war between Washington and Beijing and the end of the US growth period, according to the French newspaper Le Monde, which has drawn up a number of experts and study results.
In the United States, short-term borrowing is becoming more expensive than long-term, the stagnant Che phenomenon, which is not specific to the United States.
The report, prepared by Mary de Forges, pointed out that a survey conducted earlier this month showed that 49% of US corporate managers expect an economic contraction by the end of 2019. More than 80% of them are convinced of a global recession in 2020.
Economic war
In addition, the international context reinforces these concerns. The prospect of continued economic war between Beijing and Washington despite the current truce remains on the table if no final agreement is reached by March.
Elsewhere in the world, GDP has shrunk in several countries including Japan, private sector growth in the euro area has fallen, and the tendency to break up has increased, all of which threaten the growth of the economy this year.
On the other hand, she says to Katiba that there are those who say that it is not possible to cut a recession despite this worrisome international context.
End of reduced loans
The report notes that the strong impact is due to the erosion of the effect of US tax cuts and the US interest rate hike policy, raising the end of a decade in which interest-bearing loans have been negligible, slowing the economy but ensuring no inflation .
| Raising Interest on Loans Predicts US Economic Slowdown (French) |
As for China, the report says Beijing has relaxed restrictions on its equity market and has cut taxes on households and businesses. This policy will ensure stability in growth and benefit emerging countries, according to some experts.
Risks present
The writer notes that some are concerned about the marked double weakness of the United States and China, the two countries that are economically strong globally. She explains that this situation is not new because it has occurred three times in 2011, 2013 and 2016, since the financial crisis.
Le Monde quoted another economist as saying the situation had not adversely affected the economy of the rest of the world, adding that it was necessary for the United States and China to make adjustments that would ensure the necessary balance.
The euro zone has experienced some problems, such as the auto sector in Germany, the disruption of exports to Turkey and the movement of yellow jackets in France, which will inevitably affect its economy and cause its growth to slow down, according to some experts.
In Europe, as in the rest of the world, risk will remain and a trade confrontation between Washington and its partners could occur.
But there is no need to worry - the author says, based on the opinion of some specialists - because the likelihood of global economic deterioration remains weak.