World

Trump victory may cause recession

This article is more than 12 months old

If real estate tycoon Donald Trump wins the White House in November, the global economy could slip into a recession, according to a forecast from Citigroup on Thursday.

In a research note, a team led by the US bank's chief economist Willem Buiter said the election was a major source of uncertainty in the global economy.

The note said: "Our base case is for a (Democratic presidential nominee Hillary) Clinton victory and mostly continuity in policies."

It added that a Clinton administration could result in a major fiscal expansion.

A victory by the Republican nominee could foretell of darker times, the team said.

Assuming increases in global uncertainty and tightening of US financial conditions, the note said that a Trump victory could lower global GDP growth by around 0.7 to 0.8 percentage points.

It said that this would push GDP growth "easily below our benchmark for a global recession of 2 per cent global growth at market exchange rates in 2016/17". - AFP.

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