January 21, 2020
World GDP latest publications
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.
The global slowdown extends into 4Q19, as some incoming figures continue to be weak despite a better tone on trade negotiations and lower brexit risks. Services and domestic demand continue to sustain growth while manufacturing and trade have stabilized in Q3, but confidence data for Q4 have been mixed so far.
Global growth has slowed in recent months, affected by protectionist tensions, with a negative impact on financial markets that has been partly reversed thanks to the reaction of central banks. Our new GDP forecasts imply lower overall growth in 2019 and 2020 (3.5% and 3.4% respectively).
2018 started with the expectation that this time around the world economy really would be able to chalk up a second consecutive year of solid growth and successfully navigate through two of its main hazards: US monetary normalisation and China’s slowdown.