Snapshot - Watch/Listen

Outlook 2019: 60 seconds on the global economy

We forecast global growth to slow in 2019 and the dollar looks set to weaken with US interest rates peaking mid-year.


Keith Wade

Keith Wade

Chief Economist & Strategist

We expect global growth to slow down in 2019. We think there will be more impact from the trade wars, so the external environment will get more difficult for the main economies. The US and China, in particular, will continue their trade wars and continue to slow down. That will have an impact on growth elsewhere, so Europe and Japan will also be affected by the slowdown.

We do think though that the US interest rate profile is going to show a peak next year. So, the Federal Reserve will continues raising rates, but we think they will stop when they get to 3%.

One of the other factors that will slow down the US economy is that fiscal policy, which has been so important in 2018, is going to become less of a factor. So, the US economy from the fiscal side is going to get less of a boost. As we head into 2020 though, we think that growth could slow quite materially.

The upside of this for global markets is that we could see a turn in the US dollar. As it becomes apparent that interest rates could peak, then we would expect the dollar to weaken again, and that could be very important for global liquidity and important for global emerging markets.

Important information: The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This article is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. Issued by Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA, which is authorised and regulated by the Financial Conduct Authority. For your security, communications may be taped or monitored.