Global growth outlook tilted to the downside - Wells Fargo
|According to analysts at Wells Fargo, global growth may be starting to slow. The see the slowdown in China as one of the main concerns.
Key Quotes:
“Our outlook for the global economy is little changed from our last update, although we now see a further deceleration in global GDP growth in 2019. To reflect this, we have slightly lowered our global GDP forecast for 2019 to 3.6% from 3.7%, while leaving our forecast for 2020 unchanged at 3.4%.”
“G20 economies have continued to grow at a reasonable pace throughout 2018, while global economic activity remains resilient evidenced by solid global export volumes, increasing at 3.9% year-over-year in August, slightly below the 2017 average, but sturdy nonetheless.”
“One of our primary concerns is a sharper-than-expected growth slowdown in China. We believe this will result in a material slowdown to developing economies, which may also may weigh on global growth in 2019. We have also lowered our 2018, as well as 2019, growth forecasts for the Eurozone. GDP, sentiment and economic activity data have been softer than expected, leading us to revise our 2018 GDP growth forecast to under 2%, the lowest since 2016.”
“Risks to the outlook seem tilted to the downside, which may result in slower global economic growth than we are currently forecasting. The primary concern being a further escalation in trade tensions between the U.S. and China. There is also some possibility of faster monetary tightening, especially in the U.S.
and Canada, if labor markets improve and wage pressures continue to increase. This may lead to central banks removing accommodative policy conditions at a quicker pace than currently expected.”
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