Growth Slows, but No Recession Yet
Tuesday, March 26, 2019
Global economic growth has significantly deteriorated in the first quarter of 2019, but economists from credit rating agency Fitch Ratings don’t believe it signals the beginning of a recession.
The company’s Global Economic Outlook for March 2019 points to several factors contributing to the global economic slowdown:
- The eurozone growth outlook has weakened sharply.
- Evidence of a slowdown in China has become much clearer.
- Activity in other emerging markets, including Turkey and Argentina, has decelerated.
- World trade growth weakened steadily through 2018.
- The US-China trade war may have supressed and distorted trade flows.
- Weaker emerging domestic demand has been a key contributor to the trade slowdown.
“Despite the sharply deteriorating growth picture, we do not see the onset of a global recession,” the report said. “The U.S. economy is still growing above trend, low unemployment and solid household income growth are supporting consumer spending and fiscal policy is being eased. Some of the recent eurozone weakness reflects temporary factors that should start to abate soon. China has eased policy further both through tax cuts and lowering banks' reserve requirements. The increase in U.S. tariffs on Chinese imports that we had been expecting at the beginning of March has not yet materialized, and there are growing hopes that it may be avoided.”
Read the full report.