Is The World Really In A Recession? No One Knows

Money worries are something plaguing many people right now, both in the United States and around the world. Fears of not having enough to cover the essentials are mounting, prompting plenty to start finding ways to save every cent they can. However, is the world really in a recession? 

It seems there might be some conflict over whether a recession is actually happening or is set to happen sometime soon. While many of us are definitely facing an economic crisis of sorts, it seems it’s hard to say with absolute certainty what is going on. That doesn’t necessarily make the current situation any better, though.

Aspects of the US economy suggest a recession might not be on the cards

Some factors, particularly in the US, might seem to suggest that a recession isn’t actually on the cards. For one, job growth has been a continuing trend for over a year, prompting wage increases of 5.2%. Meanwhile, the unemployment rate has reportedly kept at a low of 3.5%. Furthermore, the US dollar is reportedly growing stronger, something that would usually signify a flourishing economy. Unfortunately, the US dollar has a habit of strengthening in times of both economic decline and growth. What’s more, it being so strong can have a negative impact on other countries, thereby contributing to a potential global recession.

Countries like the UK and Australia are potentially predicting years without economic growth

Even if the US manages to avoid a recession, if other economies around the world end up there, the global economy will be in a dire position. One country that’s reportedly plowing into a recession is the UK, with the Bank of England recently raising its benchmark interest rate to 1.75%. In light of this, the UK is predicted not to have any economic growth for two years, signifying a bleak outlook for the near future. Other banks have reportedly taken similar action to the UK, including the Reserve Bank of Australia. However, while they might not predict much in the way of growth anytime soon, they’re eager to avoid recession. According to them, “keeping the economy on an even keel” is their key priority.

Other countries are already facing economic collapse

While these countries are potentially predicting a bleak future, some are already in the midst of a gloomy present. Sri Lanka has reportedly suffered economic collapse, leading them to default on international loans and face shortages of essentials like food and fuel. Aside from spelling disaster for those within the country, the situation in Sri Lanka also poses a warning to others who might soon follow in their wake. Countries like Egypt and Pakistan have also faced economic struggles recently, partly due to the strength of the US dollar. There’s also the apparent weakening of the Russian economy to consider as well. With trading unlikely to resume between Russia and much of the world anytime soon, it could spell further disaster that will send the world into a recession.

According to Bloomberg, many of the world’s major economies are going to be in recession within the next year. It’s not a pleasant thought, especially as the US won’t emerge from this unscathed, even if it doesn’t join them in this economic decline. Still, there’s every chance that things could change before then.