UK, Japan only tip of iceberg, 18 other countries at risk of recession (2024)

Japan and the United Kingdom slipped into technical recessions (at least two successive quarters of GDP contraction) during the September-December quarter of 2023. Recessions in these two countries made headlines due to their large economies. However, this is only the tip of the iceberg. The fear of technical recession looms over several parts of the world.

FOUR COUNTRIES UNDER TECHNICAL RECESSION SO FAR

Along with the UK and Japan, Ireland and Finland also went into technical recessions in the fourth quarter. Ireland registered a quarter-on-quarter GDP contraction of 0.7 per cent and 1.9 per cent in Q3 and Q4 respectively. On the other hand, Finland’s GDP shrank by 0.4 per cent and 0.9 per cent in the same periods.

MANY COUNTRIES AT RISK OF SLIPPING INTO RECESSION IN Q4

With the fourth quarter GDP results of several countries yet to be released, one can’t be certain if the above-mentioned four countries alone will face recession. At least 14 countries witnessed a shrinking GDP during the July-September quarter. The 10 other countries — Denmark, Luxembourg, Moldova, Estonia, Ecuador, Bahrain, Iceland, South Africa, Canada, and New Zealand — are still at risk of slipping into recession. Denmark, Luxembourg, Moldova, and Estonia were already in recession by the third quarter.

SIX COUNTRIES AT RECESSION RISK IF GDP CONTRACTION CONTINUES IN 2024

Among the countries that released their fourth quarter GDP results, six of them reported GDP contraction for the first time in the December quarter. These countries were Malaysia, Thailand, Romania, Lithuania, Germany, and Colombia. Germany showed a contraction of 0.3 per cent. Being the biggest economy in the Eurozone, it can bring down the growth of the entire region. Incidentally, the Eurozone reported a stagnation (at zero per cent) in Q4.

IS INDIA IMMUNE TO SLOWING GLOBAL ECONOMY?

While India’s GDP has been performing relatively better, no one is immune in the era of globalisation. External headwinds are poised to hurt India’s economy too, as service exports are a major part of revenue generated by India’s IT industry and global price rise can make India’s imports expensive.