J.P. Morgan estimates the chances of a global recession at 60%: what it means for people
4 April 16:16
Investment bank J.P. Morgan has increased its forecast of the probability of a global recession in 2025 from 40% to 60%. The reason for such a pessimistic forecast was the new trade duties imposed by US President Donald Trump, Komersant ukrainskyi reports citing Reuters.
As reported by , on April 2, US President Donald Trump announced the introduction of “mirror” tariffs against almost all countries of the world (except Russia, Belarus and the DPRK). These tariffs, according to the White House, will be half of the tariff that a particular country has imposed on US goods. For example, China allegedly imposes a 67% tariff on U.S. goods, so the U.S. imposed a 34% tariff on Chinese goods.
For those countries that do not impose special duties on American goods, a basic tariff of 10% was introduced.
Trump called the introduction of such trade barriers “Liberation Day” and said that this day would go down in US history as the beginning of the restoration of the American economy and greatness.
Investors, however, are extremely negative about such steps. Analysts at J.P. Morgan believe that American policy has been less favorable for business than previously expected. According to Kasman, the negative impact of the tariff increase will be exacerbated by other countries’ countermeasures, deteriorating sentiment in the US business environment, and supply chain disruptions.
According to the agency, a group of analysts led by Bruce Kasman noted in their analytical note:
“Throughout the year, destabilizing U.S. policies were seen as the most significant risk to the global economy.”
Similar warnings were also expressed by Barclays and Deutsche Bank, which warned that the US economy could quickly fall into recession if Trump’s tariff restrictions continue to be in effect.
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What is a recession?
A recession is a period of significant decline in economic activity in a country or region. Technically, it is defined as two consecutive quarters of declining gross domestic product (GDP). Simply put, this is a time when the country’s economy is “sick” – production falls, businesses shut down, and people start spending less.
Recessions are usually characterized by an increase in unemployment. Faced with falling sales, companies often cut costs and lay off employees. This creates a vicious circle: fewer people have jobs, which means less money is spent on goods and services, which leads to a further reduction in production.
Historical examples of recessions
One of the most famous examples of a recession was the Great Depression of 1929-1933. It started with the US stock market crash on Black Tuesday, October 29, 1929. The US economy shrank by almost 30%, unemployment rose to 25%, and thousands of banks went bankrupt. The consequences were felt around the world for a decade.
A more modern example is the Global Financial Crisis of 2008-2009, which began with the collapse of the American real estate market and led to the deepest global recession since the Great Depression. Many large banks and financial institutions went bankrupt or were rescued by governments, and millions of people lost their jobs and homes.
A recent example is the 2020 recession caused by quarantine restrictions that shut down many businesses, especially in the service sector. This recession was notable for its speed – the economy collapsed almost instantly after the lockdowns were introduced, but the recovery in many countries was also quite fast thanks to large-scale government support programs.
Recessions are a natural part of the economic cycle, and economists often say that they perform a “cleansing” function – inefficient companies close down, and resources are redistributed to more productive sectors. However, for ordinary people, recessions always mean hardship: job losses, reduced income, economic uncertainty and stress.
