Overall, the global economy will avoid a recession — assuming no escalation of major geo-political risk — and improve in 2020, The Conference Board said in a report released Thursday.
However, a separate report by The Wall Street Journal found that 65.3% of private-sector economists said the US manufacturing sector is in a recession, The Hill reported. Growth is expected to slow further.
The Institute for Supply Management reported earlier this month that its Manufacturing Purchasing Managers Index contracted for the second month in a row during September, and the rate of contraction had accelerated from August.
The Conference Board
The Conference Board’s report, which looked at the entire global economy, forecast an improvement in GDP growth will take place in 2020 with global GDP likely growing at 2.5%. However, it forecast global GDP will slow to 2.3% this year from 3.0% last year.
It noted the bottoming out of a decline in industrial production that began last year in China and spread across the world this year.
“The global economy has taken a bigger hit in 2019 than anticipated and it seems we have arrived in a world of stagnating growth,” said Bart van Ark, chief economist of The Conference Board. “But even though recession fears are widespread, we expect some recovery in 2020 as China’s overcapacity problem is being addressed, supply chains are getting restructured, the risk of an escalation of trade disputes recedes and productivity growth continues to recover.”
US gross domestic product will grow at 2.2% in 2020, according to The Conference Board. However, it noted the UK economy will likely enter a recession.
“Irrespective of whether a deal or no-deal Brexit emerges by late 2019 or early 2020, a contraction of the UK economy over multiple quarters will be difficult to avoid,” according to the report. “If a no-deal Brexit emerges, the immediate impact on the economy depends on what share of companies are well prepared to offset negative effects from delays in bringing goods and services across borders with Europe and how disruptions in the flow of foreign workers are managed by the government.”