麻豆传媒

TORONTO -- Two of the world鈥檚 most prominent financial players are warning of the risk of a global economic slowdown, but experts say there鈥檚 no reason to believe a full-on recession is in the cards anytime soon.

Speaking in Montreal on Monday, World Bank Group president David Malpass described the state of the global economy as 鈥渇ragile,鈥� pointing to the World Bank鈥檚 initial prediction that the global economy would grow in 2019 at 2.6 per cent, its slowest pace in three years.

鈥淲e now expect growth to be even weaker than that, hurt by Brexit, Europe鈥檚 recession and trade uncertainty,鈥� he said, according to published on the World Bank website.

Kristalina Georgieva, the new managing director of the International Monetary Fund, said Oct. 1 that she expected global economic growth this year to be at its lowest level in nearly a decade. The IMF is also cutting its forecast for the global growth rate, which it had projected at 3.2 per cent this year and 3.5 per cent in 2020.

鈥淲e expect slower growth in nearly 90 per cent of the world. The global economy is now in a synchronized slowdown,鈥� she said in a speech in Washington, D.C.

However, there is a big gap between slowed growth and outright recession. It is normal for global GDP growth rates to fluctuate significantly from year to year. A recession -- defined as GDP shrinking for two or more consecutive quarters -- is much more rare.

The last recession in the U.S. occurred between 2007 and 2009. Canada was in a recession in the first half of 2015, but didn鈥檛 feel the prolonged economic misery that typically accompanies recession at that time.

THE VIEW FROM CANADA

Canadian analysts say they expect the global slowdown in economic growth to play out in Canada as well, but don鈥檛 see either the country or the world coming anywhere near a recession.

鈥淭he Canadian economy will keep growing, albeit at a slower pace,鈥� Kip Beckman, a principal economist with the Conference Board of Canada, told CTVNews.ca on Thursday via telephone.

He said low unemployment, rising wages, dropping mortgage rates and a rejuvenated housing sector will help keep Canada鈥檚 economy growing, although they won鈥檛 be enough to cause skyrocketing growth either.

鈥淭here is some good news in Canada, but certainly we鈥檙e not looking for growth to rise above 2 per cent for a while,鈥� he said.

Fred Lazar, an associate professor of economics at York University鈥檚 Schulich School of Business, said in an interview that the global economy slipping into a recession would likely require a major international development, such as conflict in the Middle East sending oil prices skyrocketing or unrest in Hong Kong spreading to mainland China.

鈥淭here are a lot of these sort of question marks around it. Are they likely to materialize? There鈥檚 always a possibility. I would view it as quite slim, though,鈥� he said.

Lazar said he expects growth to slow in China, while Europe could find itself in a recession, but those two developments combined would not be enough to cause the entire global economy to contract.

鈥淲e鈥檙e not on the precipice or going to fall into the abyss. We鈥檙e not anywhere near that,鈥� he said.

For his part, Beckman is forecasting 鈥渨eaker growth 鈥� but not a global recession.鈥�

鈥淚 know there鈥檚 been lots of talk about this, but unless the U.S. drops into a recession 鈥� which we don鈥檛 see 鈥� I don鈥檛 think there鈥檚 going to be a global recession,鈥� he said.

TRADE TENSIONS

Experts are agreed that a recession is a remote possibility at best, even though virtually every forecast for the world economy has been downgraded repeatedly over the course of the year.

The main driver of these increasingly gloomy projections has been trade uncertainty. Various trade conflicts will result in the loss of about 0.8 per cent of the global GDP by 2020, Georgieva said Oct. 1. That鈥檚 far higher than what the IMF had previously considered a worst-case scenario.

鈥淲e are already shooting ourselves in the foot,鈥� she said.

鈥淭he results are clear. Everyone loses in a trade war.鈥�

It鈥檚 the latest in a series of signs that trade disputes are taking a legitimate toll on the economy, both via direct impact and by creating negative reactions in financial markets.

The U.S.-China trade dispute has hogged headlines in recent months, but it isn鈥檛 the only international incident contributing to sluggish growth globally. Japan and South Korea are locked in a trade war of their own, Italy has just slipped out of one period of  recession and could be headed for another, and nobody knows what is going to happen as the Brexit deadline nears at the end of the month.

鈥淭he geopolitical tensions are higher than normal,鈥� Beckman said.

鈥淭hat鈥檚 something simmering in the background which we鈥檒l have to be aware of going forward, and that鈥檚 responsible for the smaller growth.鈥�

That simmer could come to a boil next week as a Chinese delegation visits the U.S. to talk trade. Whatever happens, economic leaders will be watching closely 鈥� especially since next week is also when the IMF will release its next world economic outlook.

With files from AFP