Business

Trump victory could cause ‘global’ recession, forecasts Citigroup

WASHINGTON, UNITED STATES: If New York developer Donald Trump wins the White House in November, the global economy could slip into recession, according to a forecast from Citigroup 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.

“Our base case is for a (Hillary) Clinton victory and mostly continuity in policies,” the note said, adding that a Clinton administration could result in a major fiscal expansion.

A victory by Republican candidate Trump could foretell of darker times, however, they said.

Presuming increases in global uncertainty and tightening of US financial conditions, “a Trump victory could lower global GDP growth by around 0.7-0.8” percentage points, the note said, “pushing GDP growth easily below our benchmark for a global recession.”

The note defined recession at world GDP expansion of 2.0 per cent or less, at market exchange rates.

Trump, who has lent his name to a broad array of commercial ventures with of varying degrees of success, has campaigned on his business acumen as antidote to the perceived failures of conventional wisdom in Washington.

The New York Times on Thursday put the odds of a Trump victory over democratic rival Clinton at 12 per cent.

The Trump campaign could not be reached immediately for comment on the Citigroup report.

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