Research by trade finance provider Stenn states that close to half of the firms in the UK (46%) and US (45%) predict their country will go into recession in 2020.
The poll included over 700 senior executives at medium-large businesses across the UK, US and China. It revealed that 37% of UK firms and 35% US firms expect to see a global recession or international global crisis in 2020.
In the UK, 33% of firms expect the economy to shrink and over 14% expect it to contract by 1-3%. Another 6% believe the UK economy will stay flat with no growth.
In the US, 16% of firms expect the economy will shrink in 2020, most likely by 1-3% (7%) and 6% also expect it to stay flat with no growth.
Dr. Kerstin Braun, President of Stenn Group, stated:
Kerstin Braun
2019 was weaker than expected and the stakes are only higher for 2020. Governments around the world are having to act forcefully to prevent the economic hit from Covid-19 deepening, taking a coordinated approach and opening the liquidity pipe for both fiscal and monetary support.
While a low interest rate provides an important cut in borrowing costs for businesses and consumers at this delicate moment, the coronavirus outbreak will be a real test of the health of the UK and US economies. Lowering rates alone isn’t enough to be effective in offsetting the economic impact of Covid-19. We already know the Chinese economy is going to be hit in the first and second quarter.
For us, the plunge in oil coupled with the economic damage of Covid-19 marked the beginning of a global recession. Our research showed that at the beginning of the year, half of UK and US businesses predicted a recession and a third predicted an international global crisis, and just three months into 2020 and we’re starting to see this play out.
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