Consumers alone shouldn't trigger the next recession

Abstract

▀ If consumers in advanced economies were to hike their savings and rein in their discretionary spending in response to fears about the economy, we project global GDP growth in 2020 would slow to a subdued 2.1% (below our 2.5% baseline forecast), but the world economy would avoid a recession. ▀ The risks of rising precautionary savings aren't uniform across the advanced economies. For instance, the UK, Australia, Canada and Japan look particularly vulnerable to slowing retail sales, which could trigger a stronger downturn in those countries. ▀ Economies with the highest rates of consumer debt are also likely to be more at risk to weaker discretionary spending. In this respect, Australia, the Netherlands and Canada stand out the most.