THE world economy is heading for troubled waters, with recession in 2020 now a clear and present danger, said the United Nations Conference on Trade and Development (Unctad).

In its Trade and Development Report 2019, released today, Unctad said the warning lights are flashing around trade tensions, currency movements, corporate debts, a no-deal Brexit and inverted yield curves.

“There is little sign that policymakers are prepared for the storm ahead.”

The report called for focus to be trained on boosting jobs, wages and public investments, replacing policymakers’ obsession with stock prices, quarterly earnings and investor confidence.

It projected global growth to fall to 2.3% this year, from last year’s 3%.

Several emerging economies are already in recession, it said, while some advanced economies, including Germany and Britain, are dangerously close.

Trade growth is set to slow sharply this year to 2% from 2.8% due to weakening global demand, and compounded by tariffs imposed by the US.

Unctad said the bigger concern is that 10 years after the 2009 crisis, the global economy remains “excessively financialised and fragile”.

It said debt has become a dominant driver of global growth, but failed to deliver a surge in productive investment, fuelling financial speculation instead.

“In this environment, developing countries have seen debt transformed from a long-term financing instrument to help unleash their future growth potential, into a potentially high-risk financial asset, subject to the vagaries of international financial markets and proliferating short-term creditor interests.” – Bernama, September 26, 2019.