I have recently read some articles that warn of an upcoming Economic Recession. It made me wonder, "What are these predictions based on?" The articles don't provide much detail. So I want to ask, "Do you foresee an Economic Recession in your country in 2019? If so, why? If not, why not?
Any time the economy is close to 'maxed out' on employment, there is very little space to improve output. It's possible to over-invest at this time without getting a reasonable return - it doesn't have to happen, of course, it is merely possible. Moreover, Fed policy lately has been too restrictive as evidenced by the growth rate of combined money and velocity being lower that enough to support 5% nominal gdp growth. Raising interest rates is already a mistake.
Yes, recession is possible in 2019. Particularly, across the oil based economies that fail to build the necessary safety net through non-oil sector, with robust monetary policy that could sustain exchange rate. The recent drop in international oil price is a great warning.
From last 5 decades world has faced almost 8 financial crises both regional and global nature, first the trend is big indication of next one. Technically dangerous level of world debt and inflated increase in last 10 years which is 26% of world's GDP, high business cost due to US-China trade war is enough for destruction. Brexit in presence of automated trading mechanism might be a trigger to next recession after first half of 2020.
No in my country, i.e. India we do not foresee 'Recession in 2019'. The growth rate of 7 to 7.5% is what we all have projected and would largely materialize for 2019.
However, IMF & the World Bank are sending alerts all its member countries that World GDP will slow down in 2019 & 2020 for the various reasons you and others have narrated here.
The chance for a Recession in the United States rests on several issues. Unemployment is not going to be able to go much lower. As it starts it steady increase the forces of demand will decrease, making a Recession possible. Also, the debt that has been built up by corporations may slow down the rate of growth of the economy.
The role of politics is also instrumental in helping a Recession to gain traction. The reign of Donald Trump may weaken market forces by sapping the entrepreneurial spirits. The 2017 tax reductions have run their course. The efforts to build a southern wall will take up much too much attention and move the national focus away from economic support for American growth. If the Fed feels constrained by political pressure, inflationary effects may begin to appear.
Dear Paul Stock,
I also found many articles containing macroeconomic analyzes suggesting a slowdown in economic growth in 2019.
Best wishes