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Why China's economic slowdown could trigger a major recession




  China's stock market recession economy GDP
China's GDP has slowed to the worst pace in 28 years, and analysts worry it could trigger a global recession. | Source: Shutterstock

From CCN.com: According to new figures from the International Monetary Fund (IMF), the European Central Bank (ECB) and the Chinese government, Europe and China, are struggling 201

8 after a weak year of growth.

ECB President Mario Draghi said on Jan. 24 that economic downside risks could be a threat to the eurozone economy, given geopolitical uncertainties, the US-China trade war and global financial market volatility as key factors.

China and Europe: Weakening May Lead to Global Recession

Earlier this month, a market strategist Russel Napier wrote in a column that the fall of the euro could trigger the collapse of the global monetary system and lead to a global recession.

Napier said:

The most important consequence of this collapse will be the destruction of the Euro. The expected success of the far-right and the left in the European Parliament elections in May this year marks the beginning of the end of monetary union. Both extremes share a commitment to the return of sovereignty to their parliaments, which is incompatible with a single currency.

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] ECB President Mario Draghi confirmed in an official speech the decline in the momentum of the euro and the Eurozone on Thursday, explaining that the central bank must create a new inflation and economic forecast by the end of the first quarter of 2019. [19659004] Draghi stressed that a wide range of instruments such as bonds, interest rates and long-term Credits could be used to stimulate the Eurozone economy. However, analysts are not convinced that it would be enough for the eurozone to recover completely by the end of the year.

A business commentator Greg Ip noted that the numbers published by the IMF suggest that this is the case worldwide. The economy is expected to grow by 3.5 percent in 2019, with no short-term global recession.

Ip said, however, that the series of revisions made by the IMF in its forecasts and forecasts pose a problem for central banks around the world and depending on the strategies of key regions such as the Eurozone and China, the global economy may be subject to ongoing turbulence in the coming years ,

"This last disappointment is not the story; The real story is the serial disappointment that this expansion has gone through from the start. The IMF continues to expect a return to the 4% growth that prevailed in the 2000s, and has had to correct downwards again and again, "wrote Ip

. The Chinese government reports that China's economy in 2018 will only be around 6% 6% had grown and recorded the lowest pace in more than two decades.

USA Economic growth also declining

Several reports over the past week have suggested that the eurozone and China's struggle could affect the US economy in the short term.

Already Announced Conference Director Economic Director Ataman Ozyildirim expects economic growth in the US to slow to the end of the year after a slight decline in the last quarter of 2018.

Since the end of December The major stock market indices, including Dow Jones, S & P 500, SSE Composite and Nikkei 225, have performed relatively well, but analysts believe that the global economy remains vulnerable to a possible downturn and turnaround.

Selected image from Shutterstock [19659021]
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