Recovery in Brazil will continue with the new government raising prospects of more business-friendly policies and GDP growth of 2.2% in 2019, followed by 2.4% growth in 2020. Argentina’s economy is likely to continue in a recession, contracting by 1.3% in 2019. Growth in the region overall will remain below trend. Do you have more information on the Latin American economy? Eurozone short-term interest rates are likely to stay below 1% until the end of 2021. Our latest baseline forecast calls for a single small interest rate increase during the fourth quarter of 2019, and by the end of 2020 we expect the European Central Bank’s refinancing rate (its central policy rate) to reach 0.4-0.8%. How likely is it that European interest rates start increasing in 2019? Growth is likely to slow down towards 3-5% in 2019, declining closer to long-term trend annual growth of 2-3% afterwards. However, this response already captures the main impact of the tax cuts on firms’ desired investment levels, and risks of an escalation in the US-China trade war have increased business uncertainty. There was a pick-up in business capital investment including R&D in 2018, with growth for the whole year likely to come in at 6.5-7.5% in real (inflation-adjusted) terms. You can find out more about global economic forecasts here.ĭoes the US data show any pick-up in capital investment, R&D from the tax cut enacted in 2018? Is that a sign that the uptick in growth could be sustainable? Chinese private consumption is expected to increase by 7.2% in 2019, compared to 6.1% GDP growth. Consumption growth in China is expected to continue to significantly exceed GDP growth as the country rebalances towards consumption. Real (inflation-adjusted) consumption growth is expected to decline in line with lower GDP and income growth in advanced economies. Ho w do you expect consumer markets to react to slower global economic growth in 2019? Below we will provide some of the highlights. We have received a solid amount of questions, not all of which could be addressed during the live Q&A session. Worsening financing conditions and the spread of populist rhetoric will also continue to represent an important political risk.
Escalating trade tensions and slowing global trade are the main downside risks to the global outlook next year. We forecast the global economic growth to start cooling down gradually in 2019, mostly on the back of decelerations across developed economies. Our recent webinar The Global Economy in 2019 discussed the outlook for the global economy this year.
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