Will China's coronavirus outbreak send the world economy into recession?
Iranian people wear protective masks to prevent contracting coronavirus, as they sit in taxi in Tehran, Iran February 25, 2020.WANA /Nazanin Tabatabaee via REUTERS
What’s more, forecasting global recessions is tricky because most countries can’t match U.S. data for its breadth. It’s also rare for the world economy to actually shrink - prior to 2008-2009, that happened only in 1990-1991. “That would be the tipping point. The question then will be if world growth will fall under 2%,” he added.If the world’s biggest economy tips into recession, it’s likely others will follow. But a closely watched Leading Economic Index in the United States, compiled by the Conference Board think-tank, hit a record high in January.
Now, the coronavirus has sent three-month borrowing costs above 10-year rates while the two-year/10-year curve is less than 20 basis points from inversion. The index stood at 5.1 in December, off three-years lows touched in mid-2019 during the Sino-U.S. trade spat. But recovery has probably fizzled this year as the virus dampened activity.If growth hinges on booming trade, the Baltic Dry Index shipping benchmark is sounding alarm bells. It hit three-year lows this month and has dipped during every previous recession. Since September the BDI has plunged 80% to around 506 points. It troughed during the 2016 growth scare at around 300 points.
Global composite global PMIs from JPMorgan showed output and new orders still expanding last month. But February’s composite is likely to be very different.Bond yields and inflation usually rise when growth is strong and vice-versa. So the recent tumble in market-based inflation gauges - five-year forward swaps - in the euro zone and the United States is cause for concern.
Indonesia Berita Terbaru, Indonesia Berita utama
Similar News:Anda juga dapat membaca berita serupa dengan ini yang kami kumpulkan dari sumber berita lain.
'This is different' — El-Erian warns against buying this pullback amid coronavirus fearsDisruptions to earnings and the economy from 'shock' events such as the coronavirus tend to stick around longer than more fundamental downturns, the Allianz chief economic advisor said.
Baca lebih lajut »
Global stocks roiled as Italy and South Korea sound coronavirus alarmStock markets around the world are selling off on Monday morning as coronavirus cases spike in Italy, South Korea and the Middle East.
Baca lebih lajut »
Tom Cruise flees Italy over coronavirus fears on Mission Impossible film setTom Cruise flees Italy over coronavirus fears on the set of Mission: Impossible 7 film set with the the impact on the film's release currently unknown
Baca lebih lajut »
Coronavirus Disease 2019 (COVID-19)While CDCgov considers COVID19 a serious situation and is taking preparedness measures, the immediate risk in the U.S. is considered low. Everyone should always take simple precautions to help prevent the spread of respiratory illnesses. coronavirus
Baca lebih lajut »