Whenever we recall the 1930s we inevitably remember the Great Recession and the reaction is caused. The Great Recession was the most serious financial crises to have ever occur but now many are questioning if a similar event is awaiting us in the near future.
Many people are of the opinion that the world economy still has not recovered from the damage caused by the Great Recession and the International Monetary Fund (IMF) has backed up this belief saying that we still have not managed to create crash proof systems. This had endangered our current economy severely.
An official statement from the director of IMF states that since we have failed to recover our economy we are prone to suffer more damage from the crashes in the future.
War is the biggest reason that disrupts the economy the most. And it is suspected that the two most powerful nations, America and China are going to battle it out for the first place as the global superpower. This why many have predicted that the world economy will be effected on a massive scale.
Similarly, the rates of interest have been lowered in the past couple of years which has caused countries to take debts without a second thought. This has caused global debt to reach the level of one hundred and eighty-four trillion dollars ($184 trillion). With the increase in global debt, it is predicted that the global economy will surely be affected by this debt.
The 21st century is China’s golden era as it rises to take the crown of the global superpower from America. For over nineteen years China’s economic performance has seen remarkable growth and countries like Australia and Germany are the top exporters from China.
However, recently its growth has been slowing down and has reduced to six point five percent. Although the percentage is not bad, China has been in a better place than this. This decline is troubling for China’s economy.
Right now many are worried that because of the current state of global political relations in times of crises no one will be willing to help the other. This makes us believe that we are not financially or politically prepared to suffer any economic crises.