UK & Japan Slipped into Recession, 18 Other Nations in Row

UK and Japan entered technical recession following consecutive quarters of GDP contraction.

The GDP of at least 14 countries shrank in the quarter ending in July–September.

Six nations reported a decline in GDP in the December quarter for the first time.

Economy Slipped into Recession

During the September–December quarter of 2023, both Japan and the United Kingdom entered a technical recession, defined as at least two consecutive quarters of GDP loss. Because of their sizable economies, the economic downturn in these two nations garnered media attention. But this is just the very tip of the iceberg. Apprehension about a technical economic downturn is prevalent in many regions of the globe.

Technical Recession: Four Countries Already Feeling the Pinch

In addition to Japan and the UK, Finland and Ireland experienced a technical recession during the fourth quarter. Ireland saw a GDP decrease of 0.7% in Q3 and 1.9% in Q4, respectively, on a quarter-over-quarter basis. In contrast, Finland’s GDP decreased by 0.4% and 0.9% during the same time periods.

Global Recession: Many Countries Teetering on the Brink

One cannot be positive if the four nations listed above experienced a economic decline on their own while the fourth quarter GDP statistics of several other countries are still pending. 

The GDP of at least 14 nations shrank in the July–September quarter. There is still a chance that the ten other nations—Denmark, Luxembourg, Moldova, Estonia, Ecuador, Bahrain, Iceland, South Africa, Canada, and New Zealand—will enter a economic downturn. By the third quarter, Denmark, Luxembourg, Moldova, and Estonia had already entered an economic decline.

Six of the nations that disclosed their GDP statistics for the fourth quarter did so after experiencing their first GDP contraction in the December quarter. Malaysia, Thailand, Romania, Lithuania, Germany, and Colombia were among these nations. Germany saw a 0.3% contraction. It has the potential to impede regional growth as the largest economy in the Eurozone. In Q4, the Eurozone, incidentally, declared stagnation (at zero percent).

Is the U.S. Economy Resilient to Global Recession?

Despite an environment of increasing interest rates intended to restrain economic growth, the U.S. economy grew in 2023. The GDP grew at an annualized rate of 3.3% in the fourth quarter of 2023, following an unexpectedly strong annualized GDP growth rate of 4.9% in the third quarter. The economy increased by 2.5% during the year, which was higher than the 1.9% growth rate in 2022.

In 2023, the Federal Reserve may have succeeded in preventing a economic decline by achieving a “soft landing” for the economy, according to GDP reports.

According to U.S. Bank experts, real GDP growth will likely be moderate over time, but it is likely that the economy won’t experience a recession in the near future.

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