As 2020 begins, it’s time to take stock and look at economic growth in 2019 to determine what can be done to help global expansion in the years ahead. The one lesson from 2019 and into 20202 is that Asia will lead economic growth going forward.
The IMF Explains The Current Global Reality
After slowing sharply in the last three quarters of 2018, the pace of global economic activity remains weak. Momentum in manufacturing activity, in particular, has weakened substantially, to levels not seen since the global financial crisis. Rising trade and geopolitical tensions have increased uncertainty about the future of the global trading system and international cooperation more generally, taking a toll on business confidence, investment decisions, and global trade. A notable shift toward increased monetary policy accommodation—through both action and communication—has cushioned the impact of these tensions on financial market sentiment and activity, while a generally resilient service sector has supported employment growth. That said, the outlook remains precarious.
Global growth remains subdued. Global growth is forecast to be confirmed at 3.2 percent in 2019, picking up to 3.5 percent in 2020. Chinese and US trade talks seem more positive now, but that alone won’t impact global trade significantly.
Asia to Lead Economic Growth
When 2019’s number are finalized it is estimated that 4 of the top 5 fastest growing economies in the world will be Asian. This trend is expected to remain constant in the year ahead with India and China dominating global growth.