Global economic slowdown risks escalate26 / 11 / 20 Visitors: 589
Starting in October 2019, pessimistic sentiments regarding the outlook for the global economy have sharply escalated. The reason for this was a number of statements by major world politicians and macroeconomic indicators.
The actions of the world's major Central Banks (CBs) were political signals indicating a slowdown in the global economy. In the second half of 2019, they started to cut key interest rates.
Thus, the US Federal Reserve System has cut rates twice by 25 bp. p. to the level of 2.00%.
ECB kept key interest rates. He also announced the resumption of the quantitative easing program and applied a system of tiered rates.
The Reserve Bank of Australia (RBA) has cut rates three times since June this year by 25 bp. p. to the level of 0.75%.
And this is only part of the actions of the world Central Banks aimed at stimulating the national economy. But most importantly, all major world banks do not deny the possibility of further stimulating the economy, if necessary.
We can say that the Central Bank is ahead of the curve and has secured itself against a slowdown in the global economy with stimulating measures, actually preparing for the worst, but alas, this is not the case. Since active stimulus measures began only now, in the second half of 2019, and signs of a recession and a trade war have been traced for several years.
The International Monetary Fund (IMF) has lowered expectations for global GDP growth four times since last October. The IMF cited a number of reasons, among which the US-China trade war comes first.
IMF First Deputy Managing Director David Lipton, in his October 1 speech, noted that signs of a slowdown in the global economy are growing at a more significant pace than was previously observed, indicating a strong likelihood of another decrease in the IMF's forecasts for the world economy. Global GDP growth forecast for 2019 is 3.2%, 2020 - 3.5%.
The indicators of GDP growth rates of large countries, all as one, show a slowdown.
The recession process has just begun to gain momentum. It approached zero levels of GDP growth. The key drivers behind the slowdown in global economic growth remain relevant. The market is in for a significant recession, if not a new crisis.