Five big economies are at risk of recession. It won’t take much to push them over the edge.
“The bottom line is that the German economy is teetering on the edge of recession,” said Andrew Kenningham, chief Europe economist at Capital Economics.
Mexico just dodged a recession— usually defined as two consecutive quarters of contraction — and its economy is expected to remain weak this year. And data suggest that Brazil slipped into recession in the second quarter.
Germany, Britain, Italy, Brazil and Mexico each rank among the world’s largest 20 economies. Singapore and Hong Kong, which are smaller but still serve as vital hubs for finance and trade, are also suffering.
While growth has been dragged lower in each country by a specific cocktail of factors, a global manufacturing slump and a sharp drop in business confidence have made matters worse.
China’s massive economy is growing at the slowest pace in nearly three decades as the country wages a prolonged trade war with the United States, which will impose new taxes on Chinese exports in September and December.
“The common feature is the weak global backdrop,” said Neil Shearing, group chief economist at Capital Economics.
The International Monetary Fund last month cut its forecast for global growth this year to 3.2%, the weakest rate of expansion since 2009