Accelerating economic growth

The International Monetary Fund (IMF) 1) has moderately lowered its forecasts for 2019 and 2020. It now predicts that global economic growth will be slightly below the 2018 rate. These lower expectations are primarily due to the trade conflict between the USA and China. Other factors include risks stemming from financial policy in Italy, the increasing uncertainty about the economic impact of the United Kingdom leaving the European Union and the downturn in Turkey.

Economic growth rates in Germany and in the eurozone as a whole are forecast to be slightly below or on a par with the level seen in 2018. The pace of growth in the US economy is expected to slacken, particularly in 2020. China’s growth is also likely to falter in 2019 and next year.

GDP growth

% 2018 2019 2020
Global 3.7 3.5 3.6
Eurozone 1.8 1.6 1.7
Germany 1.5 1.3 1.6
Spain 2.5 2.2 1.9
France 1.5 1.5 1.6
Italy 1.0 0.6 0.9
USA 2.9 2.5 1.8
China 6.6 6.2 6.2

The business climate index published by the ifo Institute of Economic Research, which covers trade and industry in Germany 2), fell from 102.0 points to 101.0 points in December 2018. Companies were again less satisfied with their current business situation. Their expectations for the months ahead were also gloomier. The ISM purchasing managers’ index 3) in the USA had risen to 56.6 points as at 1 February 2019. January was therefore surprisingly strong for US industry.

1) IMF, ‘World Economic Outlook Update’, January 2019.
2) ifo Institute of Economic Research, January 2019.
3) ISM Institute for Supply Management, February 2019.