Atradius: Global Economic Outlook - May 2018

lunedì 11 giugno 2018
Atradius: Global Economic Outlook - May 2018

The global economic upswing, underway since H2 of 2016, is continuing to strengthen. Recoveries are broadening into more emerging markets and global trade and investment activity have finally been picking up. At the same time, risks to the outlook have increased substantially since the November Economic Outlook. US policy uncertainty and a potential trade war could quickly darken the current bright skies

- Global GDP growth is forecast to accelerate to 3.2% in 2018, the strongest annual expansion since 2011. Growth is expected to remain strong in 2019 but moderate slightly to 3.0%.

- The US economy is outpacing other advanced markets, with growth set to expand 2.8% this year before easing to 2.4% in 2019. After a very strong year, the eurozone economy is forecast to expand a solid 2.2% this year before easing further to 1.8% in 2019. Growth is also easing in Japan while it stays resilient in the UK.

- GDP growth across emerging market economies as a whole is picking up strongly. Latin America is set to see the strongest acceleration, to 2.0% in 2018 and 2.9% in 2019. Eastern Europe is expected to see some momentum easing from 3.0% this year to 2.5% next year. Emerging Asia will continue to enjoy the strongest growth, but a gradual slowdown in China is forecast to increasingly drag on regional growth, bringing it down to the still respectable 5.8% in 2018 and 5.5% in 2019.

- The global upswing has translated in further improvements in the insolvency environment. After a 4% decline in corporate failures across advanced markets in 2017, Atradius forecasts a further 3% decline this year. Insolvencies are also on a downward trend in key emerging markets.

The key trends underpinning the global economic upswing as well as the underlying risks are discussed in Chapter 1 of this Economic Outlook. Global growth is increasingly broad-based, with recoveries in trade and investment underway, as well as oil and commodity prices. We highlight the significant increase in the risk of a trade war. However, there are also positive developments on trade that should not be ignored: at the global level, more policies are implemented to facilitate than to restrict trade and some countries are now accelerating trade liberalisation negotiations.

Naturally, US protectionism now tops our list of risks to the global economic outlook’s bright sky. The second highest risk we identify also stems from the world’s largest economy: misguided Fed policy. The remaining risks are (3) a hard landing in China, (4) a financial market correction, (5) heightened geopolitical risk, and (6) oil price volatility.

In Chapter 2, prospects and risks in developed economies are presented. The US outlook is revised up from the previous Outlook, as a loosened fiscal policy adds fuel to the economy that was already going strongly. The fiscal stimulus could increase the risk of misguided Fed policy and will reduce the policy tools to combat the next downturn in the US. Policymaking uncertainty, especially related to trade, may bring on that downturn more quickly than expected. The eurozone will continue to enjoy loose monetary policy and tightening labour markets but some momentum will ease as export growth slows. The UK is expected to remain resilient while Advanced Asia loses some momentum alongside slowing Chinese growth.

The outlook for emerging markets is discussed in Chapter 3. Special attention is paid to EMEs’ vulnerability to global trade developments and initiatives undertaken to increase trade, in an effort to mitigate these risks. China’s dominance in Asia and extensive investment activities across emerging markets, especially in Sub-Saharan Africa and Asia, are also causing more opposition and a possible threat to debt sustainability in some EMEs.

The bright sky foreseen for the global economy in 2018 is further reflected by the modestly positive insolvency outlook presented in Chapter 4. A 3% decline is forecast in aggregate corporate bankruptcies across advanced markets this year. The UK is the only real exception to the positive outlook. In Advanced Asia, Japan’s insolvencies are expected to stabilise at historically low levels while corporate failures in other markets decrease strongly despite rising headwinds from China. Steady declines are also forecast for key emerging markets with available data – especially in Brazil as it bounces back from a deep recession.

Fonte: Atradius