4 Key Takeaways from DCI’s “Global Outlooks and Economic Trends” Event
December 17, 2018
Last week, Development Counsellors International (DCI) held its fourth annual international event on Global Outlooks and Economic Trends, featuring Fernando Freijedo, an analyst from The Economist Intelligence Unit (EIU). As we wrap up 2018 with headline after headline about global trade and the world economy, many are wondering what to expect in 2019. Freijedo offered some insight on the global economic outlook in the coming year. A few key takeaways:
2018 Is As Good As It Gets:
It has been a tremendous year economically for the U.S., China has done better than expected and Japan has also fared well. While the global economy is experiencing a particularly bright moment right now, Fernando argued that the U.S. is about to head into its final year of fast growth, before the global economy (led by the U.S., Chinese and European markets) slows down in 2020.
The Bilateral Trade War Between the U.S. and China; The Good and Bad:
The EIU officially views the U.S.-China dispute as a trade war. Fernando emphasized there is still room for additional tariffs. The dispute ultimately represents a race between the U.S. and China to be the world’s leading economy in the medium term (over the next 15 years) and hence, this strategic competition will ensure the trade war continues past 2019. However, like all trade wars, there are winners and losers. As the trade war continues, the Chinese economy will slow – negatively impacting commodity traders worldwide – and countries like Bangladesh and Vietnam stand to benefit from the relocation of supply chains from China to other markets in Asia.
Europe Has Emerged from a Debt Crisis Exceptionally Well:
The last two years, especially 2018, have been good for Europe. The continent’s economic outlook for 2019 is bright. As Fernando stated, “If Europe lived in a bubble, it would continue to do well for years to come.” Without the existence of such a bubble, there are three key issues Europe will need to address to sustain its strong economic footing: responding to international trade disputes (specifically, the U.S. stepping back from unilateral deals globally); Europe’s energy dependency, which points to a larger geopolitical issue for the region; and reacting to political fragmentation as the “new normal,” with the rise of new parties across the political spectrum in countries from France and Germany to Sweden and Hungary.
The FED Will Remain a Key Indicator to Watch in 2019:
While the FED continues to be concerned about corporate debt in the U.S., EIU forecasts three more interest rate hikes in 2019. The FED’s ongoing reaction to the trade war will also be key to the economic impact felt here in the U.S.
What do you think 2019’s global economy will look like? If you were in attendance at our international event last week, we’d love to hear your takeaways! Tweet us at @aboutdci.