The outlook for the global economy has weakened since our last update. The IMF now expects global GDP growth to be 3.5% in 2019 and 3.6% in 2020 after growth of 3.7% in 2018. This is 0.2 and 0.1 percentage points lower than last quarter’s report. Many of the main economic indicators remain generally range-bound, and our heat map shows an increasing number of neutral factors. This reflects the reality that risks are rising, but not necessarily going to come to pass and highlights the difficulty in firmly calling the peak of the global expansion.
While current global headline numbers have not been as bad as expected in the fourth quarter of 2018, the IMF fears that these numbers may be artificially inflated by import front-loading ahead of tariff hikes and an uptick in tech exports with the launch of new products. Supporting this hypothesis, purchasing managers’ indices have been generally less positive.
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