Prospects and Risks for the Global Economy in 2019

Abstract

The pace of global economic growth has slowed down in 2019. The slope of the United States (US) Treasury securities yield curve has become flatter. This is raising concerns about the risks of a global economic recession. The US and People’s Republic of China have been the twin engines of global economic growth. Economic performance in both advanced countries and emerging markets is slowing. The US economy is expanding at a moderate pace. However, the recovery in the eurozone is stalling, while Japan faces protracted low inflation. The outcome of Brexit for the United Kingdom economy is uncertain. Monetary authorities in the US and eurozone have eased their target rates and other policies. In emerging markets, there is a clear divergence in performance. Risks to the global economy are tilted to the downside. There are several key long-term challenges for the world economy. This paper analyses current conditions in the global economy. It also examines the near-term risks and long-term challenges to the global economy. It proposes some policy actions to address the downside risks and long-term challenges.