Market Speaks: Global Economy Is In Synchronized Slowdown

The global economy is now in a synchronized slowdown, noted Kristalina Georgieva, the Managging Director of the IMF. Two years ago, the global economy was in a synchronized upswing. Measured by GDP, nearly 75 percent of the world was accelerating. Today, even more of the world economy is moving in synch but, unfortunately, this time growth is decelerating. In 2019, we expect slower growth in nearly 90 percent of the world, she noted in a speech titled ‘Decelerating Growth Calls for Accelerating Action’.

This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade. Despite this overall deceleration, close to 40 emerging market and developing economies are forecast to have real GDP growth rates above 5 percent — including 19 in sub-Saharan Africa.

In the United States and Germany, unemployment is at historic lows. Yet across advanced economies, including in the US, Japan, and especially the euro area, there is a softening of economic activity. In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year.

In China, growth is gradually coming down from the rapid pace it saw for many years.She further noted that the global trade growth has come to a near standstill. In part because of the trade tensions, worldwide manufacturing activity and investment have weakened substantially. There is a serious risk that services and consumption could soon be affected.