Financial crash WARNING: The BIGGEST threat facing the economy in 2019 REVEALED

Tuesday, December 25, 2018
By Paul Martin

THE biggest risk factors facing the global economy in 2019 are political, with instability in the United States having the potential to dent worldwide markets, according to a finance expert.

Tue, Dec 25, 2018

The economy has been plagued by fears from analysts of an impending global financial crash in the not-so distant future, with investors rattled over geopolitical tensions and a trade war between the two most powerful nations. The United States could cause global financial chaos if markets lose confidence in President Donald Trump and trade war tensions between China begin to escalate, Yrjö Koskinen told From a region perspective, a no-deal Brexit, yellow-vest protests in France and long-term growth problems in Italy, were listed as possible points of contention for the European economy. Britain leaving the European Union without a deal would be “an economic disaster” for the UK, according to Mr Koskinen, and would have knock-on effects for the rest of the bloc.

Brexit uncertainty has already proved detrimental for the pound with Sterling losing around 13 percent compared to the day of the referendum.

While in France, protests over planned hikes in diesel taxes have sparked political instability with President Emmanuel Macron facing the biggest challenge to his presidency.

Mr Macron has been forced to back down on his fuel tax increases after violent protests have hit French cities.

At the same time, Italy found itself locked in a bitter war of words against EU finance chiefs over its controversial budget plans.

The cabinet had originally unveiled the budget in October, targeting a deficit equivalent to 2.4 percent of gross domestic product – three times bigger than the previous government had promised.

The political upheaval has left the euro floundering against major currencies as the nation battles, with the Italian government lowering its economic growth forecast for 2019 to 1.0 percent from 1.5 percent.

Mr Koskinen, Associate Dean for Research and an Associate Professor of Finance at the Haskayne School of Business, University of Calgary, said: “The problems in Europe may lead to a regional financial crisis for example if foreign investors keep on selling Italian government bonds and the yield spread vis-à-vis Germany keeps on widening.

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