Top 10 economic predictions for 2019

The world economy began in 2018 with strong and simultaneous growth, but the momentum faded as the year progressed and growth trends changed. In particular, the economies of the euro zone, the UK, Japan and China are weakening. On the other hand, the US economy accelerated, thanks to fiscal stimulus.

What happens in 2019?

Global growth will fall from 3.2% in 2018 to 3.0% in 2019 and will continue to slow down in the coming years. The risk of escalation in trade disputes remains high, and if this escalation occurs, the contraction in world trade could further slow the global economic predictions for 2019. At the same time, wholesale equity and commodity markets, as well as the phasing out of incentives by some central banks, mean financial conditions around the world are shrinking. In conjunction with more political uncertainty, these risks indicate a greater likelihood of stagnation in the future economy of the world coming years.

1. economy growth.It will remain above this trend and fundamentals will remain strong.

In 2018, the growth of the United States of America. UU. This trend was higher than 2.9%, with almost total acceleration due to a large dose of fiscal stimulus (tax cuts and increased spending) implemented at the beginning of the year. The impact of this stimulus will continue to be felt in 2019, but with the decline in strength as the year progresses. As a result, we expect 2.6% growth, unless in 2018, but still higher than the trend.

2. The expansion of Europe will slow further.

Euro zone growth is 1.9% in 2018, and we expect further decline to 1.5% in 2019. A series of negative economic and political factors will have a negative impact on growth, including less flexible credit conditions, greater trade tensions, a slowdown in global trade growth, And the appreciation of the euro. There is no doubt that policy concern will remain high in 2019, as events in France, Italy and Germany contribute to increased political uncertainty. In addition, continuing unrest around Brexit will affect UK growth, which will fall to 1.1% in 2019.

3. Japan's recovery will remain weak.

Growth in 2018 is expected to reach 0.8% and remains close to 0.9% in 2019. While monetary policy remains highly accommodative, there are two major delays in Japanese growth: the slowdown from the Chinese economy and the growth of trade due to the consequences of tensions Trade between the United States and China. The projected increase in construction spending before the 2020 Olympic Games will keep future economy of the world, but momentum will disappear by the end of the year.

4. China's economy will continue to slow down.

The pace of expansion will slow to 6.3% in 2019. However, the Chinese government is very sensitive to the rapid decline in growth, the recent decline in the stock market and the potential impact of US tariffs., Which has been limited so far.. In response, policy makers have launched a series of monetary and fiscal measures to help support growth and stabilize financial markets, although these measures are likely to remain modest.

5. Growth in the emerging world has been overcome and will be further reduced next year.

During 2018, growth in emerging markets fell 4.8% and will fall to 4.6% in 2019. In the future, emerging markets face a series of difficulties. First, growth in developed economies is slowing, as is the pace of world trade. Second, global financial conditions are becoming more stringent and the dollar is expected to remain strong. Third, commodity prices will remain volatile next year. Last but not least, increasing political uncertainty in countries like Brazil and Mexico could scare off foreign capital flows. Some countries will be able to address these trends, particularly dynamic economies with low debt levels, particularly in Asia.

6. Volatility in commodity markets will continue, with significant downside risks.

The weak global growth, the gradual tightening of credit conditions and the strength of the US dollar will pose challenges for commodity markets in 2019. However, demand growth next year is still strong enough to provide support. We expect the products by the end of 2019 to be slightly different by the end of 2018, but getting here and there could be another fast train.

7. Inflation will not rise much, if it happens.

Global consumer price inflation rose from 2.0% in 2015 to 3.0% in 2018. Most of this was due to the transition in the developed world from deflationary or deflationary conditions to near inflation rates close to the central banks' target of 2.0%. In the short term, IHS Market predicts that global inflation and inflation in the developed economy will remain close to 3.0% and 2.0%, respectively.

8. The actions of the World Bank will continue to differ.

Possibly the US Federal Reserve. UU. Prices increase in December and 3 times more in 2019. Pending the Bruit process, the Bank of England may raise interest rates next year, while the Bank of Canada and some central banks are emerging markets, possibly Brazil. India and Russia can do the same. We do not expect the ECB to raise interest rates until the beginning of 2020, and we do not expect the Bank of Japan to end its negative interest rate policy until 2021. The People's Bank of China is moving in the opposite direction, growth, and will continue to provide modest stimulus.

9. The US dollar will maintain its strength against most currencies.

We expect the dollar to remain at current highs for most of 2019. On the other hand, the high and rising levels of political uncertainty in Europe may be very negative for the EUR and the GBP. We expect the EUR / USD to end in 2019 at around $ 1.10, compared to $ 1.14 at the end of 2018. At the same time, we expect the renminbi / dollar to remain fairly stable below the psychological level of 7.0. As a result of the Chinese government's desire for financial stability.

10. The risk of political shocks increased, but may not have been enough to cause a recession in 2019.

Policy errors remain the biggest threat to economic predictions for 2019 and beyond. These include the increase in debt levels and budget deficits in the United States. UU., High debt levels in Europe and Japan, and potential errors of major central banks. Last but not least, the trade disputes on low heat are serious, not because they have caused damage so far, and have not done so, but because they can escalate easily and get out of control.