There is a sense of skepticism in the air concerning the future of the world economy in the next couple of years. The prime-time media debates, columnists, and strong statements from analysts are further fueling this fire of unpredictability.
It is forecasted that the growth of the global economy will be 3% in the year 2019 and 2020.
Over the last one decade, it has been through a lean patch confronting a multifold of difficulties, risks, and it is anticipated to be same in 2019 disrupting the economic activities of developing nations and cause significant damage to growth prospects ahead of developed powerhouses.
While the international investment & trade will go steady, there will massive trade tensions especially in Europe because of Brexit and Trump’s trade policies. On the other hand, the world’s developing economies will experience a slump and will steadily progress at 4.2%. And, not to mention, the downside risks cannot be overlooked, as they have become colossal than ever.
| S.No. | 5 Predictions For World Economy in 2019 |
|---|---|
| 1 | Europe’s Expansion Will Slow Even More |
| 2 | Japan’s Recovery Will Remain Weak |
| 3 | China’s Economy Will Keep Decelerating |
| 4 | Emerging Market Growth Will Decelerate |
| 5 | Global Inflation Rates Will Remain Close to 3.0%Economy Downslide |
One major risk associated with the economy of the world is the abrupt downslide that will shake the global trade progression. This had fallen up to 5% at the beginning of 2018 and scaled to zero in the last quarter of 2018. With expected escalation around world trade conflicts, the financial conditions worldwide look robust.
Top 10 Economic Forecasts for 2019
Let’s Take A Tour
1. US Economy Will Remain Above Par in 2019
While, Donald Trump is ostensibly criticized for his international policies, but the US economy is expected to be above trend. In the segments of productivity and labor force, the potential growth would be around 2%. For the year 2018, 2.9% was the escalation owing to a massive dose of fiscal stimulus on the back of greater spending & tax cuts. The impact is still forecasted to be felt in 2019 too, but by the end of the year the effects will lessen up. So, in a nutshell, the US economic advancement will settle around 2.6% well below the 2.9% mark of 2019, but still above the trend.
2. Brexit Expected on 29th March 2019
With just a few days to Brexit, the UK’s and world economy both are experiencing the negative impacts of Britain’s decision to leave the European Union. Ever since the 2016 voting, Brexit has been the leading topic of financial uncertainty on the world economic map. A month back, the Governor of the Bank of England gave a new term to Britain’s exit from European Union as “Brexit Fog,” as this is bound to have dark shadows of prosperity slump in the UK. Ever since there the UK has been in the scenario of “Leave or No Leave,” the country economy is significantly suffering, and the future is next to impossible to foretell.
If May’s government took the hard Brexit route, in that scenario the UK will lose its tariff-free trade status with the European countries, so the costs of export will quickly soar hampering Britain economy massively dependent on trade. Now, coming to the effect of Brexit on US economy correlated by the weakening of Pound that will make exports to the UK far more expensive, thus slowing down farming and manufacturing industries of the United States. Moreover, Britain’s investment in the US is substantial; thereby there are dark clouds over 2 million jobs US/UK Jobs.
After the US, now we look into the consequences of Brexit over the Europeans Union. Since people of Britain voting out of EU, the many anti-migration parties are the real beneficiaries; this is perhaps why Merkel, Chancellor of Germany has already declared she won’t file her name for reelection. The Brexit anti-migration political groups strengthening is analyzed to find its roots in France too, where Yellow Vest movement is creating political instability. What’s if France and Germany decide to leave, the European Union will fall apart.
3. Yellow Vests Movement Bringing Uncertainty to French Economy
The Yellow Vests Movement is an economic justice campaign in France going from strength to strength since its beginning in November 2018. The movement was cultivated from an online petition asking for the participation of masses, latter mass demonstrations took the Macron government by storm. Finance Minister Bruno Le Maire has already warned the public that this violent economic war movement will have serious negative consequences over the French’s economy. Moreover, the economic analyst is suggesting the political unrest in the country will slow down tourism growth. Initial, the protest was against rising gasoline prices, but the latter the demanded higher pensions, ending certain taxes and wealth tax, and it didn’t stop here, even asking to slash the salaries of parliamentarians.
4. Global Trade Wars
In the year 2018, many trade wars broke out; most of the financial markets worldwide have taken a massive hit. The Bank of America reported the economy war has lead to a big dip of 6% in S&P in 2018. $2 trillion is what the stock market of the world most populated nation China has lost last year, and it is anticipated to follow the same suite the following year. Further, the concerns regarding China economy is expected to be a drag on the United States of America’s financial growth in the next half of 2019.
5. Economic Impact of the Space Race in 2019
The space race first happened during the era of the Soviet Union with the US. They competed with the aim of gaining dominance over the space. The race to the solar system invitee uncertainties regarding the world’s economy in 2019 and ahead.
6. Taxes on Apple, Amazon, Google & Facebook
The French government has recently announced taxes on Apple, Amazon, Google & Facebook. 4570 million is the expected amount to go into France’s treasury in 2019. But, this step will have many long-term impacts on France, spanning from diminishing investments to cutting down on tech jobs in the country.
7. INDO-Pacific Power Play
The US and China conflicts have come out of the closed doors, grappling one another’s economic growth. Both these countries are leveraging their partners to have a clear-cut message on their friendship, in fact, choose anyone.
8. Grey Wars
In the age of nuclear weapons, the direct conflicts between strong nations are truly fearsome in 21st century, as not only this will have its say on the economy of developed countries, but also a threat to civilization.
9. Trump Policies Impact on the World Economy
The veteran analysts are suggesting that the many foreign policies of Trump are leading the US to its worst economy chaos. His various contradictory policies include the deregulations of banks, tax cuts, and anti-migration policy, trade and currency wars.
10. Tension in Asia
The recent episode on terror strike in Pulwama and India’s military response has taken tension between India and Pakistan to another level and Asia is on the edge. This is a conflict that has the makings to trigger World War III in the coming years, fingers crossed!
To Wrap Up
From the above, the major talking point has been the exit of Britain from the European Union and in how many ways this step will redefine the financial infrastructure of the UK & EU.
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