Is the world heading for recession? Alarm bells are ringing – The Economist

EDINBURGH — The world should start preparing for a recession, says The Economist. The respected business and finance publication outlines the challenges for the global economy after stock markets fell across the world. Although countries are better equipped for recession than last time around, policymakers in richer countries are hamstrung by already-low interest rates. Rising nationalism will make it harder to get a collective effort going to re-energise growth. – Jackie Cameron

By Thulasizwe Sithole

Last week stock markets tumbled across the globe as investors worried, with good reason, for the second time this year, about slowing growth and the effects of tighter American monetary policy, writes The Economist.  

"The world economy's problem in 2018 has been uneven momentum. In America President Donald Trump's tax cuts have helped lift annualised quarterly growth above 4%. Unemployment is at its lowest since 1969. Yet the IMF thinks growth will slow this year in every other big advanced economy. And emerging markets are in trouble," it cautions.

"This divergence between America and the rest means divergent monetary policies, too. The Federal Reserve has raised interest rates eight times since December 2015. The European Central Bank (ECB) is still a long way from its first increase. In Japan rates are negative. China, the principal target of Mr Trump's trade war, relaxed monetary policy this week in response to a weakening economy," says the global business magazine. 

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