Global recession risks are declining – Danske Bank

Danske Bank analysts suggest that following significant headwinds over the summer, the global economy is showing tentative signs of stabilization.

Key Quotes

“This stabilisation comes on the back of sizeable monetary policy stimulus in both advanced and emerging markets in addition to an expansionary fiscal policy in China.”

“Despite the stabilisation and expectations of a modest recovery in the global manufacturing sector in early 2020, we have revised down our outlook for the global economy amid continued trade uncertainty and waning stimulus measures.”

“However, the risk of a global recession over the next year or so has declined to 25% (from 30%) on the back of an improving chance of a trade deal and the receding risk of a no-deal Brexit, on the back of the UK election.”

“The outcome of the US-China trade talks is a key risk to the global economy in 2020. The discussions could go in either direction, prompting considerable uncertainty for our global forecasts.”