Updated Global Outlook | Towards the stabilization of global growth, though risks persist

Summary

Recent data have been relatively positive and signal to some stabilization. Lower trade tensions, less uncertainty of a hard Brexit in the short-term, a lax monetary policy and somewhat expansionary fiscal policy should support a slightly higher growth. Global GDP will grow steadily at 3.2% in 2020 and 3.3% in 2021.

Key points

• Key points:
• Our BBVA-GAIN model points to a slightly higher growth estimate for 4Q19 (0.8% QoQ) than previously expected, but growth is clearly below the one in previous years.
• In the US, the prospect of a mild growth moderation is maintained (2.3% in 2019, 1.8% in 2020 and 2% in 2021) supported by the strength of private consumption, although investment is a concern.
• China GDP growth will slow down (6.1% in 2019, 5.8% in 2020 and 5.5% in 2021), less than previously expected, driven by recent data, an improvement in relations with the US and greater willingness to implement a fiscal stimulus.
• Eurozone growth is revised slightly upwards due to better-than-expected incoming data (1.2% in 2019, 0.9% in 2020 and 1.2% in 2021), but still at moderate rates.

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