Current Economic Evaluations And 2019 Global Expectations
Although nowadays we are all focused on forthcoming Christmas preparations, we have some issues to talk about just before the new year.
This essay assesses some major expectations and forecasts about 2019 global economy made by experts and some international companies.
Let's start with the comment made my The Economicst Magazine. According to it, the world economy is on a shaky ground. This statement is also supported by experts who concerns slowing growth rates in both developed and emerging economies.
Slowing growth, trade wars, fluctuations in stock markets and global debts (which caused a financial crisis 10 years ago) are major problems which need to be evaluated. Besides that, there are some negative perceptions such as increasing interest rates in global economy and decreasing liquidity.
All these negativities increases the possibility of recession of next year.
Let's look the situation in a more specific way. The obvious slowdown in major economies plays significant role in these prospects mentioned above.
In United States, because of some concerns about economic recovery, interests are rising. (The Federal Reseve has raised interest rates eight times since December 2015.) When interest rates rise in America but nowhere else, the dollar strengthens. That makes it harder for emerging markets to repay their debts.
It is seen a clear declaration on companies' profits and increase in deficit spending.
According to the report of New York Times, there is a setback for portage and 8.9% fall in housing sales in October. Besides these, the debt rate of companies is quite high.
In China, which is the second biggest economy of the world, situation is not different. It is forecasted that there is clear slowdown on its current growth. Moreover, at the moment there has been a reduction in domestic consumption reported. Another indicator of deceleration is tendency for avoiding luxury expenditures. According to research of some companies (such as Euromonitor and Bain&CO) Chinese customers are now more timid than before about their spendings.
Additionally, the debt of both private sector and Chinese government might cause a crisis not only in China but also in global finance.
Finally, in emerging economies things are not so bright.
Companies indicate that both their profits and growing expectations are decreasing gradually. There are many uncertain cases that investors concern about. Also, what worrying is dollar debt of these economies has increased from 9% to 14% since 2008. Since dollar interests are raising, deficit of currency and debt issue might become a crisis which might cause major financial global risks.
WHAT DOES IMF STATE?
The IMF warns about the same risks which I have just highlighted above. The dominant US economy has been shielded from the ill effects so far because of stimulus provided through tax cuts and spending policies but that will wear off by 2020.
Still, the trade debates sparked by President Donald Trump that have led to tit-for-tat exchanges of tariffs among major trading partners are affecting China, other Asian economies and more vulnerable countries like Argentina and Turkey, along with Brazil.
Referances: https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD
https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD
https://www.bbc.com/news/business-46445913
This essay assesses some major expectations and forecasts about 2019 global economy made by experts and some international companies.
Let's start with the comment made my The Economicst Magazine. According to it, the world economy is on a shaky ground. This statement is also supported by experts who concerns slowing growth rates in both developed and emerging economies.
Slowing growth, trade wars, fluctuations in stock markets and global debts (which caused a financial crisis 10 years ago) are major problems which need to be evaluated. Besides that, there are some negative perceptions such as increasing interest rates in global economy and decreasing liquidity.
All these negativities increases the possibility of recession of next year.
Let's look the situation in a more specific way. The obvious slowdown in major economies plays significant role in these prospects mentioned above.
In United States, because of some concerns about economic recovery, interests are rising. (The Federal Reseve has raised interest rates eight times since December 2015.) When interest rates rise in America but nowhere else, the dollar strengthens. That makes it harder for emerging markets to repay their debts.
It is seen a clear declaration on companies' profits and increase in deficit spending.
According to the report of New York Times, there is a setback for portage and 8.9% fall in housing sales in October. Besides these, the debt rate of companies is quite high.
In China, which is the second biggest economy of the world, situation is not different. It is forecasted that there is clear slowdown on its current growth. Moreover, at the moment there has been a reduction in domestic consumption reported. Another indicator of deceleration is tendency for avoiding luxury expenditures. According to research of some companies (such as Euromonitor and Bain&CO) Chinese customers are now more timid than before about their spendings.
Additionally, the debt of both private sector and Chinese government might cause a crisis not only in China but also in global finance.
Finally, in emerging economies things are not so bright.
Companies indicate that both their profits and growing expectations are decreasing gradually. There are many uncertain cases that investors concern about. Also, what worrying is dollar debt of these economies has increased from 9% to 14% since 2008. Since dollar interests are raising, deficit of currency and debt issue might become a crisis which might cause major financial global risks.
WHAT DOES IMF STATE?
Still, the trade debates sparked by President Donald Trump that have led to tit-for-tat exchanges of tariffs among major trading partners are affecting China, other Asian economies and more vulnerable countries like Argentina and Turkey, along with Brazil.
Growth estimates for the euro area and Britain also was revised down.
Referances: https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD
https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD
https://www.bbc.com/news/business-46445913
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