Given the international economic tumult of trade wars, rising interest rates and Brexit, everyone is interested in what 2019 may bring for the global economy and here are my thoughts as laid out in a short post for
Focus Economics:
"The only certain things about the world economy in 2019 are uncertainty and volatility given the current state of trade relations between the world’s two largest economies at a time when economic growth in both also appears to be slowing down. The United States had a strong 2018 and is likely at the top of its economic cycle. Despite President Trump’s protests directed at the Federal Reserve, interest rates are projected to continue rising and if there is continuing disruption to U.S. and world trade the U.S. economy may enter a mild recession. Compounding this are the potential negative wealth effects on spending by consumers and investors of an increasingly volatile stock market which is reacting to a high degree of political and economic uncertainty. As for China, its rate of growth while still robust by European or North American standards is nevertheless slowing down and this is being exacerbated by the impact of US tariffs as well as a massive amount of Chinese debt that will constrain future prospects for infrastructure spending. Naturally, a resolution of the current trade disputes between the U.S. and China would go a long way in improving the world economic outlook. With respect to Europe, growth there has also been slowing and the ultimate impact of Brexit remains a large source of economic uncertainty. Meanwhile Japan continues to expand but very weakly. And of course, it remains that the recovery from the 2008-09 recession is incomplete given that fiscal stimulus and easy money have in the end generated an even larger global debt pile. Based on all this, the optimistic projection for 2019 is that overall growth will remain positive but slow from rates achieved in 2017 and 2018. The pessimistic projection for 2019 is that continued trade disputes, gradually rising interest rates, debt overhang and economic uncertainty will come together to tip the global economy into recession"
There are other viewpoints in this Focus Economics blog post and you can of course check them all out
here.
