Seventy percent of all respondents around the world say that they expect the United States will have entered a recession six months from now, and 83 percent expect a US slowdown to have a somewhat or very negative effect on their national economies over the next year, according to the latest McKinsey Global Survey on economic conditions.1 These responses were gathered during the first half of March as the credit crisis continued to expand and drive down stock markets around the world, as oil prices climbed to record levels, and as employment and consumer-spending reports in the United States pointed to a weakening economy.
However, the percentage of respondents who expect their home economies to be negatively affected by a US slowdown is slightly lower than the nearly 90 percent of respondents who currently report at least a moderate degree of linkage between those economies and that of the United States. Indeed, though the US economy has been the long-time driver of the global one, only 21 percent of executives around the world report that the linkage between their national economies and the United States has tightened over the past three years.
Meanwhile, the executives’ fears of inflation have...