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ECONOMIC OUTLOOK FOR 2019

Publish On 24, Nov 2020 | ECONOMIC OUTLOOK FOR 2019

According to polls conducted by Reuters, economists believe the outlook for the global economy will continue to be somber in 2019, with most expressing concern over the China-U.S. trade war, which has brought on tension in the financial sector.

 

This is not to mention the arrest of a top Huawei executive in Canada, an incident that has sent shock waves around the world and threatened to trigger a war between the East and the West.

 

These results on the two polls Reuters carried out this year. At the start of 2018, the surveyed businesspeople and economists were optimistic about global economic prospects. However, towards the end of 2018, out of the over 500
informants, more than half altered their forecasts, saying that the outlook will remain grim well into 2019.

 

According to polls conducted by Reuters, economists believe the outlook for the global economy will continue to be somber in 2019, with most expressing concern over the China-U.S. trade war, which has brought on tension in the financial sector.
 

“A simple dynamic is playing out in the global economy right now: the U.S. is booming, while most of the rest of the world slows or even stagnates. The stresses caused by this divergence are playing out uncomfortably in many
emerging markets,” stated Janet Henry, global chief economist at HSBC.

 

“A U.S. Federal Reserve is raising interest rates to preserve the stability of the U.S. economy,” added Henry.
More than 150 economists have identified two major factors that will bring about a global economic downturn, which are the tension in trade policies and the massive issuance of government bonds to raise funds.

 

According to analysis, the global economic growth is expected to be tempered and quite slow for consumption and export. However, a rise in wages in the global labor market might hold enough sway to drive trading and investment mechanisms but only to a limited extent as the macro environment that requite massive capitals is still stagnant.
In addition, the China-U.S. dispute is likely to continue as well. According to these polls, the global economic growth is projected to peak at 3.8% in 2019 and drop to 3.5% in 2020.

 

“First, there would be no winners from a global trade war. Even if the aggregate costs are modest and skewed toward more open economies, all countries would ultimately be worse off compared to the status quo,” said Neil Shearing, group chief economist at Capital Economics.

 

After U.S. President Donald Trump announced that it would impose duties on $267 billion of Chinese goods, everyone has been keeping a close on the tension to see how the situation will play out next year and how much the dispute between these two superpowers will affect the global economy or aggravatethe already somber trading, investment, and financial conditions.

 

Given the dim economic outlook, exercising prudence in spending and making investment will be something that everyone has to bear in mind in the years to come.