World

Trump victory may cause recession

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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