The ugly stock market drop last week began after bad news from two of the world's largest economies. China reported its worst manufacturing output in 17 years, and Germany said its economy shrank in the spring.
These are not isolated problems. In addition to China's slowdown, nine major economies are in recession or on the verge of it.
Many of these countries have a common problem: They are heavily dependent on selling goods overseas. And this is not a good time to have an export-driven economy.
China's slump and US President Donald Trump's trade war are both undercutting with the global exchange of goods that had helped power the world economy for decades, and some of these countries are seeing sharp declines in exports.
In other nations, notably Argentina and Russia, longstanding problems at home are bubbling over at a moment when global investors are skittish and quick to bolt, which exacerbates trouble.
As the woes add up, there aren't a lot of obvious rescue boats to help, which is why investors are fleeing to the usual safe havens: gold and government bonds.
"I see fires everywhere, but not a lot of firefighters," said economics professor Sung Won Sohn at Loyola Marymount University and president of SS Economics.
China has said it plans to boost disposable income to spur consumption. And a number of central banks, including the US Federal Reserve, are cutting interest rates in an attempt to spur people to borrow and spend, but economists say that is likely to have a limited effect because the world already has a lot of cheap capital.
"There is potential for a US recession, not because of the yield curve itself, but because of the lunacy of trade policy and the damage it's doing," said Mr Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Here are some key economies with recession worries.
HARMFUL TRADE POLICY
There is potential for a US recession, not because of the yield curve itself, but because of the lunacy of trade policy and the damage it's doing.
MR IAN SHEPHERDSON, chief economist at Pantheon Macroeconomics.
Germany is heavily reliant on manufacturing cars and other industrial goods to power its economy.
The German economy shrank 0.1 per cent in the second quarter after anaemic 0.4 per cent growth at the start of the year.
Two consecutive quarters of negative growth is the technical definition of a recession, and Germany is nearly there, sparking fears of an official recession by the end of the year.
Growth in Britain contracted 0.2 per cent in the second quarter after a weak 0.5 per cent performance in the first quarter. On top of manufacturing woes, the UK has seen an investment slump, largely due to uncertainty over Brexit. ITALY The euro zone's third-largest economy entered a recession last year. And this year hasn't been much better. Growth in the second quarter was just 0.2 per cent, and there is concern that will turn negative, as Italy sells some goods to Germany, which is now in worse shape. Italy is also struggling from ongoing political crises.
Mexico's economy contracted 0.2 per cent at the start of the year and barely escaped an official recession in the second quarter by growing just 0.1 per cent.
Mexico has also suffered a decline in business investment and confidence as companies fear President Andres Manuel Lopez Obrador, a leftist, will nationalise industries.
The largest economy in South America shrank 0.2 per cent in the first quarter and is widely expected to show negative growth again in the second quarter, marking a recession. Brazil has struggled to sell goods overseas and also seen sluggish demand at home.
The country is already in a recession, and it appears to be getting worse. Last Monday, Argentina's stock market dropped nearly 50 per cent, the second-largest one-day crash any nation has experienced since 1950. The country is experiencing rapid inflation and investors fear it won't be able to repay its debts.
The Asian nation last Tuesday reported its economy contracted 3.3 per cent in the second quarter, a sharp reversal from over 3 per cent growth in the first quarter.
Singapore blamed the US-China trade war for its problems, as its economy is heavily reliant on exports. Many economists watch Singapore and South Korea as strong indicators for what's ahead for the global economy.
South Korea managed to avoid a recession in the first half of the year - but barely. The South Korean economy shrank 0.4 per cent in the first quarter but rose 1.1 per cent in the second quarter, a better-than-expected performance that many experts do not think will last. Japan and South Korea are in the midst of a trade war that is expected to drag down growth and make it harder for South Korea to sell electronics and cars abroad.
Russia has struggled since 2014 as oil prices plummeted and other nations put sanctions on it because of its military actions in Ukraine. Russia has worked to shield its economy as much as possible from US government sanctions by limiting deals with the United States and in US dollars, but that has meant greater reliance on China, which is now slowing.
THE WASHINGTON POST
A version of this article appeared in the print edition of The Straits Times on August 19, 2019, with the headline 'Recession worries for nine key countries'. Print Edition | Subscribe
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