Analysts at National Australia Bank notes that global economic growth slowed further in Q2 2019 as major advanced economy (AE) GDP growth declined to its slowest pace since mid-2016.

“We expect the down trend in AE growth to continue through to early 2020 as the US-China trade dispute and other factors weigh on growth. Growth in the five largest emerging markets economies also slowed, including in India, where growth fell to its lowest level since early 2013. In the face of the global slowdown, central banks are moving to support activity; the European Central Bank cut rates this month and the Fed is expected to follow suit. Global growth of 3.1% is forecast for 2019, before edging up to 3.2% in 2020 (previously 3.3%) and returning to its long-term trend (3.5%) in 2021. Key to the upturn is the support from easier monetary policy and cyclical recoveries in Latin America and India, as well as no further escalation in trade disputes or current geo-political risks being realised.”