World teetering on the brink of recession, warns finance expert | Newstalk

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The outlook for the global economy is grim at the moment.

The global economy is teetering on the edge of a recession, an expert in finance has warned.

During lockdown, the GDP of countries across the world plummeted as businesses closed and people were forced to stay home to prevent the spread of COVID.Advertisement However, economic storm clouds are gathering once again and Cormac Lucey, who teaches finance at Trinity Business School, is pessimistic about the outlook of global economy:

“In the first quarter of this year, there were three very substantial shifts in the global economy that, in my view, bring us a lot closer to recession,” he told“The first one was that in the United States, inflation kept strengthening and that has added to the resolve of the Federal Reserve, the US Central Bank, to choke off inflation by raising interest rates. That’s going to be negative for the global economy.

“The second thing that went wrong was that there was a big outbreak of COVID in China and over there they’re [still implementing] a zero COVID strategy. So effectively, they’ve shut down Shanghai in order to choke off the virus there but that’s also choking off economic growth there.“And that in turn, thirdly, is leading to a big drop in demand and economic growth across the Eurozone where we’re located.

 

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