#Toronto, ON – April 13, 2019 – Canada – IGlobal growth is slowing as the economy works through a soft patch. Early signs suggest the worst of the slowdown might be behind us. The expansion is in a delicate situation. Investors are nervous and maintaining confidence is key to a continued expansion. The global economy is particularly vulnerable to policy missteps, notably President Trump’s continued threats to disrupt US trade flows.
“While we continue to think the soft patch
we are going through will be temporary, the global economy remains in a
delicate position,” said Jean-François Perrault, Senior Vice President and
Chief Economist at Scotiabank. “At this point in the cycle, confidence is key
to sustaining the expansion, and Trump’s misguided efforts to make America
great risk achieving the opposite.”
Highlights of Scotiabank’s Global Outlook
include:
· Canada: Above-potential growth to resume in Q2 as the
factors contributing to the soft patch in Q4 2018 and Q1 2019 are reversing.Growth is expected to
slow modestly to 1.6% during 2019 before rising to 2.1% in 2020.
· United States: A gradual US GDP growth slowdown (2.9%/2.4%/1.9%
in 2018/19/20) is expected on the back of the waning boost from fiscal stimulus.
· United Kingdom: While we expect that the UK and the EU will avoid a
hard Brexit, we forecast that economic growth in Britain will remain sluggish
in the near-term amid lingering geopolitical uncertainty and as the economy
adjusts to a post-Brexit world.
· Eurozone: Real GDP growth will slow in 2019 owing to
global trade and geopolitical uncertainty as well as certain transitory factors
impacting the European industrial sector. Domestic demand in the euro bloc
should, however, remain resilient despite external headwinds.
· Mexico: heightened uncertainty is leading to slower
growth, with GDP expected to rise by 1.4% in 2019.
· China: A gradual deceleration is underway, but recent
policy measures to raise demand are starting to bear fruit.
· Commodities: Healthy global economic growth
provides a solid demand backdrop for
commodities through 2020, allowing fundamentals
to reassert commodity-specific price paths over
the coming years
Read Scotiabank’s Global Outlook online here.
Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues. Follow this research on Twitter at @ScotiaEconomics.
Press Release: Scotiabank