According to the IMF’s latest World Economic Outlook global growth started to slow in the second half of 2018 and is forecast to slow to 3.3% in 2019 compared to healthy rates of 3.8% and 3.6% respectively in 2017 and 2018, the fastest since 2012, notes the analysis team at the Royal Bank of Scotland.
“The main culprits are fading US fiscal stimulus, slowing Chinese growth and weaker Eurozoneactivity. Medium-term global growth is expected to plateau at 3.6%, supported by the rising importance of Indian and Chinese economies, but slow productivity growth and population ageing looks set to keep growth modest in advanced economise. Risks to the global economic outlook are viewed on the downside.”
“When it comes to what drives trade imbalances between countries, new IMF analysis shows that macroeconomic forces – like fiscal policy and the strength of demand relative to supply-side capacity – play a far more important role than tariffs.”