The chances of a global "growth recession" - where world growth dips to historical troughs below 2 per cent - are about one in three next year, according to economists at Germany's biggest bank Deutsche Bank.
Using a predictive model based on financial market readings such as bond yields, currencies, equities, house prices and short-term interest rates, Deutsche said there was about a 33 per cent chance of a "serious growth recession" as experienced in the early 1970s and 1980s.
In a note to clients dated November 19, its economists said there was just less than 50-50 chance of a mini growth recession akin to those in the early 1990s and early this decade.
"The bursting of the housing and credit bubble this year and the ensuing credit and banking crisis have elevated the level of uncertainty about the economic outlook to an unusually high level," the Deutsche report said.
Due to factors such as rapid population growth, recorded world growth has rarely - if ever - been negative since World War Two, economists say.
But most reckon a world slowdown to less than 2 per cent from current rates about 5 per cent would, for most countries, look and feel like a recession - technically defined in developed economies as two consecutive quarters of economic contraction.
While Deutsche said it maintained its "cautiously optimistic" forecast for a global slowdown to 4.6 per cent growth next year from 5.1 per cent in 2007, it said the risks of a deeper pullback were now significant.
Deustche added it saw the chances of an outright recession in the United States as similar, but slightly lower.
Its models suggested the chances of a mild US recession over the next 12 months were slightly less than 50-50 and the probability of a severe recession about one-in-four.
Reuters
No comments:
Post a Comment