Bracing for a Storm
Savvy Portfolio Managers Never Stop Eyeing the Horizon for Potential Trouble
The global economy has been called "buoyant" and "bullish." But what if it goes bust? Developing markets hit 4.5 percent combined growth in 2018 and seem on track to hit 4.7 percent this year, according to an analysis by the World Bank. More than a decade after one of the worst global recessions, business leaders and economists alike have argued that fears of long-term sluggish growth aren't an immediate concern. But the next bust may not be far off. In November, Goldman Sachs predicted that--with the positive benefits of the 2017 tax cuts fading away and financial conditions tightening--U.S. GDP growth would slow to 1.8 percent in the third quarter of 2019 and to 1.6 percent during the fourth quarter. And two-thirds of business economists polled by the U.S. National Association of Business Economics expect a global recession to begin by the end of 2020.