Analysts at National Australia Bank point out that after modest improvement in Q1, indicators in major advanced economies (AEs) point to a renewed easing in growth for the rest of 2019, driven largely by the US economy.

Key Quotes

“Emerging market (EM) economic growth also continues to come under pressure. With global growth slowing, the policy outlook has turned more dovish and a reduction in central bank policy rates is likely both across AEs – led by the Fed – but also EM economies, where there has already been some policy easing so far this year. While the resumption of trade talks between the US and China is welcome, with the eventual outcome unclear, uncertainty around trade policy remains elevated and it is likely to be a drag on business investment.”

“Moreover, possible future US trade policy action is not limited to China and there are a range of other risks to the global outlook. We have left our forecasts unchanged this month, and expect global growth of 3.2% in 2019 and 3.3% in 2020. These rates of growth are below par, but not in recession territory.”

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