The momentum of the global economic expansion that slowed down in 2018 to 3.7 per cent is expected to carry on to 2019–2020, when annual global output expansion is forecast to decline to 3.3–3.4 per cent, said Euromonitor in a new report.

Advanced economies are expected to see their economic activity slow down gradually in 2019–2020, with real GDP growth averaging 1.5–1.8 per cent annually in 2019–2020, according to Euromonitor’s “Global Economic Forecasts Q2 2019”.

Labour productivity and real wage growth will improve but remain disappointing at 0.7–1.7 per cent annually. Emerging economies, by contrast, are anticipated to witness improving economic dynamics and expand by around 4.6–4.8 per cent annually in 2019–2020. India and China, despite the gradual slowdown of the latter, will remain a core of emerging economies’ output growth, the report said.

Global financial conditions have improved since the end of 2018 after big negative shocks in Q4 2018, but they remain tighter than in October 2018. The loosening monetary policy stances of the main global central banks have also supported the stock markets’ rally in Q1 2019.

Global monetary policy will tighten very gradually over 2019–2021, with both the Fed and ECB providing forward guidance of delaying further interest rate increases in 2019, according to Euromonitor.

Global economic risks remain skewed to the downside. Main risk factors include escalating trade tensions between the US and China or the EU, growing geopolitical uncertainty in Europe and Asia, greater vulnerability of US corporate debt to financial market or monetary policy shocks and risks of a no-deal Brexit. Broader risks of lower economic recovery momentum and greater uncertainty in financial markets in general also remain relevant.

Euromonitor International 4 country highlights

Eurozone

Eurozone outlook has deteriorated significantly since end-2018, but Q1 2019 readings suggest the slowdown has bottomed out. The GDP growth has been forecasted to reduce to 1.2 per cent in 2019 and 1.4 per cent in 2020.

UK

Brexit stockpiling boosted UK domestic output in q12019, but the uncertainty is likely to continue to dampen the UK outlook. Euromonitor has cut GDP growth to 1.2 per cent in 2019 and 1.3 per cent in 2020.

US

US output slowed notably at end-2018, suggesting the positive 2018 economic momentum may be ending. GDP growth forecast is unchanged at 2.4 per cent in 2019 and 1.7 per cent in 2020.

Japan

With little positive news on the domestic front and continuous trade war uncertainty on the external front, Euromonitor has downgraded Japan’s real GDP growth to 0.6 per cent in 2019 and 0.3 per cent in 2020.

The Global Economic Forecasts report focuses on quarterly macro changes for the world’s key economies and what these mean to Euromonitor’s view of the likely, optimistic and pessimistic scenarios for the global economy. – TradeArabia News Service

Copyright 2019 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.