- Just under half of firms in the UK (46%) and US (45%) predict their country will go into recession in 2020, according to research by trade finance provider Stenn
- The poll of over 700 senior executives at medium-large sized businesses across the UK, US and China, also revealed that well over a third (37%) of UK firms and one in three (35%) US firms expect to see a global recession or international global crisis in 2020
- In the UK, a third (33%) of firms expect the economy to shrink in 2020, with well over a tenth (14%) expecting it to contract by 1-3%
- A further 6% expect the UK economy to stay flat with no growth
- In the US, almost one in five (16%) expect the economy to shrink in 2020, most likely by 1-3% (7%)
- In addition, 6% also expect it to stay flat with no growth.
Dr. Kerstin Braun, President of Stenn Group, commented: “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.”