Recession Looms Internationally – Global Economy

Global growth projections and changing business activity internationally, are indicating a global pullback in economic activity, with an evolving recessionary environment.

Each year, the International Monetary Fund (IMF) releases a forecast of global GDP growth by country. Projections for 2024 are lower than they have been in prior years, with a noticeable pullback with developed economies. The IMF projects that both emerging markets and developed economies are projected to grow by 4% in 2024. GDP growth estimates for the U.S. are conservative, at 1.5%, while projections for China are at 4.2% and 6.3% for India.

France, Japan, and the U.K. have slipped into technical recessions, defined by two consecutive quarters of declining GDP data. Germany is also running the risk of falling into a technical recession as well. Germany and Japan are critical economic components of the global economy, with vast manufacturing and production, representing over $3 trillion of total global exports. A persistently weak Japanese yen has helped maintain Japanese exports, yet is inflationary for consumers in Japan especially when buying imported goods.

Economic data coming from China reveals that housing prices have been falling and property developers have been defaulting on their debt over the past year, possibly affecting consumer sentiment and expenditures in the country.

Thus far, the U.S. has avoided a recessionary environment, even as other developed economies have begun to falter. International trade activity with other countries, as well as domestic consumer expenditures, will be critical factors in validating any retraction in the nation’s economy.

Sources: CIA World FactBook, IMF

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