Today’s mini market rally notwithstanding, the talk among economists is that we may be in a worldwide recession.

Today’s edition of the Economist asks the question, “The world economy is probably already in recession. How bad might it get?”

“One by one, economies around the world are stumbling,” notes the Economist. “Early estimates suggest that gross world product, as a whole, may have contracted in the second quarter, for possibly the first time in two decades. Welcome to the first global recession of the 21st century.”

With zero growth in America and Europe, and a sharply contracting Japanese economy, the combined GDPs of the rich economies will have contracted for the first time since late 1990, it notes. “But, unlike 1990, a growing number of emerging economies are also sliding into recession. Some of the numbers coming out of East Asia are truly scary.” These emerging economies are heavily dependent on the high tech business, and they are suffering its pain acutely.

According to the Economist, at least four negative forces have driven the global slowdown: the global IT boom has turned to bust; the collapse in stock markets everywhere which has eroded households’ wealth; the jump in energy prices last year reduced real incomes in oil-consuming economies and squeezed firms’ profits; and the spillover from America’s downturn to the rest of the world has been more powerful than in the past. It notes that as the world economy has become more integrated, a downturn in one economy spreads faster to another.

The Economist Intelligence Unit, a sister company of the magazine, is now predicting that growth in the volume of world trade will drop to only 3% this year, from 13% in 2000. That would be the sharpest slowdown since 1975.

The paper says there are two reasons for optimism: aggressive rate cuts and falling energy prices. “But unfortunately, the balance of risks lies on the downside. Top of the list is the risk that America may go into recession as rising unemployment curbs consumer spending.”

It also notes that this has been an investment boom-bust cycle, not a typical post-war recession; there is the risk that Argentina might yet default on its debt; and, the biggest downside risk is that American share prices still look overvalued. “The risks of a deeper global slump remain high. But even if America avoids a recession this year, it is unlikely to return soon to the go-go days of recent years. Many American investors and consumers have yet to wake up to this fact.”

CIBC World Markets’ chief economist Jeff Rubin seems to agree with this prognosis. He has just issued a report titled, “Close to the Edge”, in which he observes that global growth this year is forecast at its lowest level since 1982.

Rubin notes that manufacturing is in a global recession already, led by the United States and Japan, with Euroland hot on their heels. He also points to events such as Argentina’s exchange rate-led recession.

Rubin observes that production has never dropped as far as it has recently without sparking a recession, that corporate spending remains weak, and job growth is stagnant.