Macroeconomic conditions

The rate at which the world’s economy is expanding slowed significantly in 2019. According to the International Monetary Fund, global economic growth for 2019 stood at only 2.9 per cent, compared with 3.6 per cent in the prior year. The developed economies and the emerging markets both recorded falls in their growth rates. The decline in the pace of expansion was particularly pronounced in the eurozone, which is heavily reliant on exports. In the US, impetus for growth declined over the course of the year as tax incentives expired. The downturn in growth in the emerging markets was mainly due to the economic slowdown in China and India.

Both global industrial output and the volume of global trade were down significantly on the prior year. These trends were driven mainly by the fact that businesses were much less willing to invest in the face of heightened risks related to the geopolitical situation and trade policy. The US dispute with China, the European Union and other key trading partners as well as the unpredictable impact of an imminent Brexit were particular sources of ongoing uncertainty. > DIAGRAM 004