Six Countries On the Brink Of Recession

The global economy has slowed down to its lowest pace in three years. Global trade and investment have been weaker than expected at the start of 2019. The primary contagion impacting the global economy is the escalating US-China trade war, Brexit uncertainty, EU-US trade disputes, and rising debt levels.

As a result, both the World Bank and the International Money Fund have downgraded their global growth forecast from 3.3% to 3.2%, and from 2.9% to 2.6% respectively.

Some key economies around the world are on the verge of recession, raising uncertainties that a global economic slowdown could contract the U.S. economy as well.

Many of the countries slowing down or on the edge of recession have a common problem: they are deeply reliant on exports of goods. This is not a great time to have an export-driven economy. Already, China posted the worst industrial output in 17 years , and the German economy shrank in Q2.

As the economic slowdown adds up, there aren’t many rescue ships to help. Thus, investors are escaping to the usual havens: Government Bonds and Gold.

A number of central banks, like the U.S. Federal Reserve, South Korea, Indonesia, Ukraine, and South Africa, are cutting interest rates to spur economic growth. In addition, China, on August 5th, allowed the Yuan to weaken past 7 Yuan to 1 U.S. Dollar to promote its exports.

Below is a rundown of key economies that may be on the verge of recession.


The Eurozone’s largest economy, in Q2, was 0.1 %, down from 0.4% in Q1. Germany is on the verge of recession, as itseconomy has experienced two consecutive quarters of negative growth (the technical definition of a recession).

Germany is heavily dependent on manufacturing cars and other industrial goods to drive its economy.

Being Europe’s leading exporter and number three globally (after China and the U.S.), all was well until Donald Trump adds you and China to his list of trade adversaries, orders from China dwindles, and the Brexit Brouhaha continues.

In order to shore up its economy, Germany is considering an economic stimulus package of €50 billion ($55.4 billion).

The United Kingdom

The U.K. economy is similar to Germany’s. GDP growth was 0.2% in Q2, down from 0.5% growth in Q1.

Apart from its manufacturing woes, Britain has seen investments fall due to Brexit uncertainty.

If Britain leaves the European Union in October without a deal (hard Brexit), it may enter a recession.


Growth in Q2 was 0.1%, down from a 0.2% growth in Q1.

The Eurozone’s third-largest economy entered a recession at the end of 2018. Although it emerged from a recession in the first quarter, 2019 hasn’t been much better as global trade falters and business confidence sours.

With it’s economy constantly lagging, Italy became the first G7 country, on March 23rd, to join China’s Belt and Road Initiative.


The largest economy in South America stagnated with growth at 0.2%, the same as Q1 growth rate.

Growth is seen slowing in 2019 due to China’s economic slowdown, Argentina’s economic crisis, and a sluggish global economy.

Brazil’s central bank, on July 31st, slashed interest rates from 6.5% to 6% to inject life into its moribund economy.


Singapore’s economy contracted by 3.3% in Q2, up from over 3 % growth in Q1.

Singapore blames the escalating U.S.-China trade war and weaker global demand for technology.

Like Germany, Singapore’s economy is heavily reliant on exports.

South Korea

South Korea GDP economy shrank 0.4% in Q1 but increased by 1.1% in Q2. The US-China and South Korea-Japan trade wars may drag down Korea’s growth, making it harder for it to sell electronics and cars abroad.

Already, electronics and semiconductors exports are down by about 20% and 30% respectively.

The Bank of Korea, South Korean central bank, on July 19th, lowered interest rates from 1.75% to 1.50% to spur growth as demand slows down and the U.S.-China trade war escalates.

Other countries include France, Japan, and Russia.

For Russia; weak consumer spending, constrained oil output due to OPEC+ meeting, and low gas demand from Europe will negatively impact its economy for the year. For France, its mainly the Eurozone slowdown, US-China trade war, and Brexit uncertainty. For Japan, lower global demand due to the trade squabbles could cause its economy to enter a recession this year.

At the moment, the U.S. economy is the major bright spot holding up much of the global economy. However, it is still vulnerable to the weak global economic outlook.

All Rights Reserved for Meziechi Nwogu


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