Mumbai, Aug 20 (IANS): After Morgan Stanley, Bank of America Merrill Lynch (BofAML) has on Monday on the basis of a survey of fund managers said a recession is imminent. One-third of those surveyed by BofAML expect recession in the next 12 months.

Thirty-four per cent Of the 224 fund-managers with $553 billion of assets under management said recession was likely in a year. However, 64 per cent said it was unlikely.

According to BofAML, this was the highest recession probability since October 2011.

BofAML's report comes days after the investment firm Morgan Stanley said a recession was due in 9 months if the US-China trade tension escalated further.

A recession is generally identified by decline in a country's gross domestic product (GDP) in two successive quarters.

Warning signals are also coming via other historic indicators of recession: the bond yield curve, which gets inverted before a recession. The yield curve is now nearly similar to what was seen ahead of the 2008 financial meltdown.

Morgan Stanley earlier said if the trade war escalated further with the US further raising tariffs on all goods imported from China to 25 per cent, "we would see the global economy entering recession in three quarters".

However, India is not close to a recession but is witnessing a crippling slowdown. Some sectors, like the automobile industry, is dangerously close to a recession. India's economy has shrunk for three straight quarters and the growth forecast is also not uplifting.

A far greater threat of recession hangs over the UK and other Europian economies. Political uncertainty owing to Brexit led its second quarter GDP to contract, raising fears of recession.

Besides the soaring trade tensions, several indicators of global economic health have turned negative since the US Federal Reserve said the rate cut was merely a "mid-cycle adjustment" and not necessary the beginning for a rate cut cycle.

Global central banks have sprung into action amid a slowdown. India cut the benchmark policy rates by an conventional 35 basis points, New Zealand by 50 bps and Thailand by 25 bps.

Recession not only causes turmoil in the financial markets, but pushes unemployment rate up and the industrial production and investment take a hit.