Risk of a global recession is minimal, IMF economist says — would take 'a lot to derail' (2024)

FAQs

Risk of a global recession is minimal, IMF economist says — would take 'a lot to derail'? ›

“When we do the risk assessment around that baseline, the chances that we would have something like a global recession is fairly minimal. At this point, it will take a lot to derail this economy.

Key Takeaways. A global recession is an extended period of economic decline around the world. The IMF uses several criteria to analyze the occurrence, scale, and impact of global recessions. Global recessions involve synchronized recessions across many interconnected economies.

After global growth exceeded expectations in 2023, businesses' perceived probability of a global recession has fallen substantially in 2024, according to Oxford Economics data. Oxford's global risk survey in January showed a recession probability of 7.2% — less than half of what it was in October 2023.

Instead, the IMF provides financial support to countries hit by crises to create breathing room as they implement policies that restore economic stability and growth. It also provides precautionary financing to help prevent crises. IMF lending is continuously refined to meet countries' changing needs.

US Recession Probability (I:USRPEM)

US Recession Probability is at 55.83%, compared to 51.82% last month and 67.31% last year. This is higher than the long term average of 14.85%.

The Washington DC-based institute this week nudged its global growth outlook slightly higher to 3.2% in 2024 and projects the same rate in 2025. “When we do the risk assessment around that baseline, the chances that we would have something like a global recession is fairly minimal.

The International Monetary Fund said Thursday that the US is running deficits that are too big and is weighed down by too much debt, and it warned of dangers from increasingly aggressive trade policies.

Also in 2022, the government reported that gross domestic product — the economy's output of goods and services — had fallen for two straight quarters, a long-time rule of thumb that has nearly always accompanied a recession. Then-House Speaker Kevin McCarthy, R-Calif., said the U.S. economy was in recession that month.

The IMF lost its primary mission when the international financial system moved away from the gold standard to a floating exchange rate system. It also is clear that the IMF's approach to economic development has been a colossal failure.

Harsh austerity measures: IMF programs often require countries to implement strict economic policies, which can be unpopular and difficult to implement. Limited resources: The IMF has limited resources, which can limit the amount of assistance it can provide to countries in need.

Who is safe in a recession? ›

Although there's no guarantee that any job is safe during periods of economic uncertainty, there are certain industries that may be less susceptible to conditions like layoffs and reductions in force. These include the medical industry, the legal industry, and essential services, like grocery stores.

Many economists, including Federal Open Market Committee (FOMC) members, anticipate a soft landing for the U.S. economy in 2024 that includes slowing GDP growth but no recession.

The NBER's Business Cycle Dating Committee defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators.

Like national recessions, a consensus on the definition of a global recession has yet to be reached. The World Bank's main indicator of a worldwide downturn is multiple major countries' economies contracting at the same time, as well as other evidence of weak global economic growth.

The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and lasts more than a few months.