Global economy to skirt recession territory, Citi says

The outlook for global economic growth was darkening, especially for emerging markets, with the UK´s upcoming referendum on its membership of the European Union a 'key' extra near-term risk, Citi´s chief economist Willem Buiter said.

Risks were rising that "genuine" world growth, taking into account the probable mis-measurement of China´s gross domestic product, would dip below a 2.0% year-on-year clip, Buiter said in a research note sent to clients.

To take note of, that rate of growth was considered by some to be the threshhold for recessions at the global level.

In his research note, Buiter trimmed his forecast for global GDP growth in 2016 from 2.7% to 2.5% and said that the "genuine" rate of expansion would be "barely above" 2.0%.

In his opinion, the Bank of Japan and the European Central Bank would ease policy further, but that "will provide only limited stimulus".

More aggressive stimulus measures could be more effective reflation tools, he added, but were "unlikely" unless global growth prospects deteriorated "much further", Buiter said.

As for Brexit, should it take place, it would have "large and adverse" effects for both the UK and the overall UK, he added.

The UK’s EU referendum is a key extra near-term global risk. Brexit, if it happens, would probably have large and adverse effects for the UK and the overall EU.