The global economy: steady or sharper slowdown?

Weak trade and productivity may outweigh looser policy, jeopardising hopes of stable global growth. 

Wednesday, July 24, 15:00 UK / 10:00 EDT

The world economy is likely to grow by around 3% this year, the lower end of the 3.0-3.5% range expected six months ago. Creating frictions, two tectonic plates underlying activity are shifting: trade after the US-China conflict escalated, and economic policy.

China is expanding fiscal policy and others may follow, perhaps Germany and the United States. Monetary tightening is off the table and some may loosen policy. However, fears may rise as to whether monetary policy can respond to financial instability and fiscal policy can meet structural reform needs. 

Indeed, prolonged weakness is more likely than outright recession but forecasts rest on stable Chinese and US growth, stronger German and Indian growth and whether especially vulnerable emerging markets worsen or improve ahead.

  • The global economy is slowing, but will growth slope steadily or sharply downwards?
  • A US-China goods trade deal may spark a market rally but will not curb the global rise of non-tariff barriers.
  • Rising protectionism risks diverting attention from much-needed global policy efforts on climate change and migration.
  • Are investors too sanguine about the risks, overestimating the ability of the US Fed and the ECB to stabilise global activity?
  • Given domestic pressures such as elections and geopolitical risks, will policymakers prioritise short-term reflation over product and labour market reforms?

Join Oxford Analytica’s experts and share your thoughts on the above and raise anything else that concerns or excites you about the Global Economy in our client conference call on Wednesday, 24 July, 15:00 UK, 10.00 EDT.