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Risk of global recession high in FY20 if trade tensions continue, says Morgan Stanley’s Chetan Ahya

Updated : June 11, 2019 07:36 PM IST

Risk of a global recession in the financial year 2020 would be high if trade tensions continue, said Chetan Ahya, chief economist and global head of economics at Morgan Stanley.

“We have had the slowdown. We were at 4 percent in Q1 of 2018 in terms of global growth and we are already down to 3.2 percent. Global recession threshold is 2.5 percent. So if we continue with this escalation, we could be, in 3-4 quarters, down at the level of 2.5 percent which would be qualifying us to be in recession at that point of time,” said Ahya in an interview with CNBC-TV18.

Talking about India, he said if a deal takes place between the US and China on June 29, it will be positive for India. He added that the industrial cycle in India is linked to the global environment.

On the GDP front, he said, “I definitely think that there was some possibility of overstatement of GDP over the last few years.”

Former chief economic adviser Arvind Subramanian, in a note that was published in The Indian Express on Tuesday, said that India's GDP growth has been overestimated by 2.5 percentage points between 2011-12 and 2016-17.
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