Ottawa, ON, Oct 15, 2019 (GLOBE NEWSWIRE) -- OTTAWA, October 15, 2019 (GLOBE NEWSWIRE) - Warning signs can be seen in every corner of the world. There is stalled or negative growth in Germany, the United Kingdom, Italy, Brazil, and Mexico. At the same time, business confidence has turned negative in Japan for the first time since 2013 and China’s industrial output is expanding at its weakest pace in close to 20 years.
After a healthy 3.2 per cent expansion in 2018, global economic growth is set to weaken to 2.6 per cent this year and 2.5 per cent in 2020 according to the Conference Board of Canada’s World Outlook Economic Forecast.
“Complex and historical geopolitical tensions and ongoing trade disputes are pulling global growth down” says Kip Beckman, a Principle Economist at the Conference Board of Canada. “Despite this, I don’t foresee a global recession” he says.
The main cause of the slumping global growth is the ongoing trade conflict between the United States and China. “When you have two countries that together account for almost 50 per cent of the global economy’s output, yes, the impact is far-reaching” adds Beckman.
While China-US trade tensions are grabbing global economic headlines, the geopolitical impacts of the tensions between Hong Kong and China, and between Japan and South Korea, are hurting growth prospects in Asia-Pacific. Weakening economic conditions in the EU have led the European Central Bank (ECB) to cut interest rates on bank reserves – the funds that commercial banks deposit at the ECB – for the first time since 2016.
Real GDP for Latin America as a whole increased by only 1.2 per cent last year. An even weaker growth of 0.7 per cent is anticipated for 2019. Next year, growth should rise to 1.9 per cent—a pace that is still far below the region’s potential, given its relatively young population compared with those of North America, Europe, and parts of Asia.
About the report:
The World Outlook Economic Forecast report examines the short-term economic outlook for the world’s major economies. In addition, it contains an in-depth analysis of issues that are relevant for understanding economic trends and developments in the world economy. The World Outlook is updated each quarter based on the latest projections available to the Conference Board of Canada. The publication can be purchased by accessing our e-library.
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Michelle Rozon | Erin R. Brophy
The Conference Board of Canada