Source: Yahoo Finance
On January 11, 2019, the International Monetary Fund declared that “The global expansion has weakened”. Global growth for 2018 is estimated at 3.7 percent, as in the October 2018 World Economic Outlook (WEO) forecast, despite weaker performance in some economies, notably Europe and Asia. The global economy is projected to grow at 3.5 percent in 2019 and 3.6 percent in 2020, 0.2 and 0.1 percentage point below last October’s projections.
However, the weaking expansion was on the road to recovery until US and China began engaging in back and forth tariffs on export goods and services as part of President Donald Trump’s Trade War.
…The global economy is projected to grow at 3.5 percent in 2019 and 3.6 percent in 2020
An update from the INF on April 02, 2019 called for “A growth slowdown and a corresponding precarious recovery process”. After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies.
Global growth is now projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020.
These global economic outlook surveys are presented by the IMF on a bi-annual basis i.e. the survey by the IMF staff is usually published twice a year. It presents IMF staff economists’ analyses of global economic developments during the near and medium term.
Offering a silver lining, the IMF elaborated that “After the weak start, growth is projected to pick up in the second half of 2019”. This pickup is supported by significant monetary policy accommodation by major economies, made possible by the absence of inflationary pressures despite growing at near potential. The US Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England have all shifted to a more accommodative stance. China has ramped up its fiscal and monetary stimulus to counter the negative effect of trade tariffs. Furthermore, the outlook for US–China trade tensions has improved as the prospects of a trade agreement take shape.
Resources
1. World Economic Outlook Reports. April 02, 2019. International Monetary Fund. https://www.imf.org/en/Publications/WEO
2. Trump’s ‘Easy’ Trade War Hits Snags as China Plays the Long Game. March 25, 2019. Bloomberg. https://www.bloomberg.com/news/articles/2019-05-25/trump-s-easy-trade-war-hits-snags-as-china-plays-the-long-game
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