<p>NOTE: the question has been modified to refer to a global recession (or I missed the global qualifier). This answer is for a national recession. The answer by @Fizz discusses the global case. I will leave my answer unchanged.</p>

<p>There is no international standard for a recession definition. Definitions are country-specific. For example, in the United States, the National Bureau of Economic Research (NBER) has a committee that makes recession date determination decisions, based on a number of criteria.</p>

<p>The NBER has a FAQ, which probably covers everything you want to know: <a href="https://www.nber.org/cycles/recessions_faq.html" rel="nofollow noreferrer">link.</a></p>

<p>(Other countries have similar committees.)</p>

<p>Otherwise, people use two consecutive quarters of declining <em>real</em> GDP as the definition of recession. The advantage is that this is uniform across countries. Some people call this a “technical recession” in countries that have a recession-dating body (like the NBER).</p>

<p>Note that we need to look at quarterly GDP, annual GDP could still rise (as in the question), yet there is a recession.</p>

<p>For countries that grow very rapidly in real terms, some people will call a reduction in the growth rate a “a growth recession”. The developed countries no longer grow that fast (in recent decades, only some Asian economies like China grew that fast on a sustained basis), and so it does not come up very often. As such, the term is not very well defined, since it is not used much.</p>

CC BY-SA 4.0
2020-03-28T22:37:31.070Z
When would there be a global recession (in terms of criteria)?
Sergey Zolotarev
CC BY-SA 4.0
2020-03-29T02:11:50.923Z
Ah. You added the global qualifier? The answer from @Fizz covers that.
Brian Romanchuk
CC BY-SA 4.0
2020-03-28T12:50:48.140Z
2020-03-29T02:14:23.697Z
2020-03-29T02:14:23.697Z
Brian Romanchuk
<p>It helps to link to articles that you're (probably) <a href="https://news.harvard.edu/gazette/story/2020/03/why-the-odds-of-a-coronavirus-recession-have-risen/" rel="nofollow noreferrer">talking about</a>:</p>

<blockquote>
  <p>It’s hard to put a number on it. For one thing there’s no agreed definition of a world recession. According to a rule sometimes used by the IMF, a world recession is when the global growth rate is less than 2.5 percent. Global growth doesn’t turn negative often. It happened in the global financial crisis of 2008 and 2009. Back then, Europe, Japan, and the U.S. went into prolonged negative growth. Meanwhile, during the 2008–2009 crisis, for China a recession meant falling from 10 to 6 percent growth. The point is, because of stronger trend growth among developing countries, if you’re measuring the rate of growth of total world GDP, the criterion for a recession can’t really be negative. Hence the 2.5 percent criterion. In any case, the important point is that the probability of a global recession is certainly much higher today than it was a month or two ago.</p>
</blockquote>

<p>The IMF <a href="https://www.imf.org/~/media/Files/Publications/WEO/2019/October/English/Ch1.ashx" rel="nofollow noreferrer">seems</a> to have picked up that 2.5% threshold because it's the 10th percentile (that is below 90%) of the growth recorded in the past 25 years... but they actually call it a "downturn" not a recession, at least in that [2019] document I found:</p>

<blockquote>
  <p>The
  resulting risk assessment can also be used to calculate
  the probability of a global economic downturn. The
  estimated probability of one-year-ahead global growth
  below 2.5 percent—the 10th percentile of global
  growth outturns in the past 25 years [...]</p>
</blockquote>

CC BY-SA 4.0
2020-03-29T00:22:24.660Z
2020-03-29T00:44:39.263Z
2020-03-29T00:44:39.263Z
fantastic peace and prosperity
<p>I heard that for 2020, the global economic forecast is recession. The growth will be less than 2.5%. But isn't recession is when there's a decrease in GDP (for two consecutive quarters, as I recall), not just a lower growth? Why is the term applied so unusually (unusually, right?) in this case?</p>

CC BY-SA 4.0
2020-03-28T15:15:56.900Z
Please rephrase your question more clearly or it will be closed.
emeryville
CC BY-SA 4.0
2020-03-28T17:41:01.897Z
"for 2020, the economic forecast is recession. The growth will be less than 2.5%." Where exactly?
fantastic peace and prosperity
CC BY-SA 4.0
2020-03-28T22:32:13.960Z
@Fizz Globally.
Sergey Zolotarev
<macroeconomics><gdp>
Isn't recession is when there's an actual decrease and not just a less rapid growth?
Sergey Zolotarev
# Isn't recession is when there's an actual decrease and not just a less rapid growth?

(Asked by: username_0 on 2020-03-28)

I heard that for 2020, the global economic forecast is recession. The growth will be less than 2.5%. But isn't recession is when there's a decrease in GDP (for two consecutive quarters, as I recall), not just a lower growth? Why is the term applied so unusually (unusually, right?) in this case?

**Tags:** macroeconomics, gdp

> **Comments:**
> **username_1**: Please rephrase your question more clearly or it will be closed.  
> **username_2**: "for 2020, the economic forecast is recession. The growth will be less than 2.5%." Where exactly?  
> **username_0**: @Fizz Globally.  

---

## 2 answers

### Answer by username_2 on 2020-03-29. Score: 4 | Accepted answer

It helps to link to articles that you're (probably) [talking about](https://news.harvard.edu/gazette/story/2020/03/why-the-odds-of-a-coronavirus-recession-have-risen/):

> It’s hard to put a number on it. For one thing there’s no agreed definition of a world recession. According to a rule sometimes used by the IMF, a world recession is when the global growth rate is less than 2.5 percent. Global growth doesn’t turn negative often. It happened in the global financial crisis of 2008 and 2009. Back then, Europe, Japan, and the U.S. went into prolonged negative growth. Meanwhile, during the 2008–2009 crisis, for China a recession meant falling from 10 to 6 percent growth. The point is, because of stronger trend growth among developing countries, if you’re measuring the rate of growth of total world GDP, the criterion for a recession can’t really be negative. Hence the 2.5 percent criterion. In any case, the important point is that the probability of a global recession is certainly much higher today than it was a month or two ago.

The IMF [seems](https://www.imf.org/~/media/Files/Publications/WEO/2019/October/English/Ch1.ashx) to have picked up that 2.5% threshold because it's the 10th percentile (that is below 90%) of the growth recorded in the past 25 years... but they actually call it a "downturn" not a recession, at least in that [2019] document I found:

> The
> resulting risk assessment can also be used to calculate
> the probability of a global economic downturn. The
> estimated probability of one-year-ahead global growth
> below 2.5 percent—the 10th percentile of global
> growth outturns in the past 25 years [...]


---

### Answer by username_3 on 2020-03-28. Score: 4

NOTE: the question has been modified to refer to a global recession (or I missed the global qualifier). This answer is for a national recession. The answer by @Fizz discusses the global case. I will leave my answer unchanged.

There is no international standard for a recession definition. Definitions are country-specific. For example, in the United States, the National Bureau of Economic Research (NBER) has a committee that makes recession date determination decisions, based on a number of criteria.

The NBER has a FAQ, which probably covers everything you want to know: [link.](https://www.nber.org/cycles/recessions_faq.html)

(Other countries have similar committees.)

Otherwise, people use two consecutive quarters of declining *real* GDP as the definition of recession. The advantage is that this is uniform across countries. Some people call this a “technical recession” in countries that have a recession-dating body (like the NBER).

Note that we need to look at quarterly GDP, annual GDP could still rise (as in the question), yet there is a recession.

For countries that grow very rapidly in real terms, some people will call a reduction in the growth rate a “a growth recession”. The developed countries no longer grow that fast (in recent decades, only some Asian economies like China grew that fast on a sustained basis), and so it does not come up very often. As such, the term is not very well defined, since it is not used much.

> **Comments:**
> **username_0**: When would there be a global recession (in terms of criteria)?  
> **username_3**: Ah. You added the global qualifier? The answer from @Fizz covers that.  

---

