Friday, January 4, 2019

''The great macro divergence'' Jean Pisani-Ferry

“The global expansion has peaked,” the OECD warns in its latest economic outlook, and performance could be weaker if downside risks materialise. The party is not over yet: global growth is expected to continue in 2019 and 2020, though at a slower pace. But forecasters are notoriously bad at spotting macroeconomic turning points, and the road ahead is hard to read.
Potential obstacles abound: more aggressive monetary tightening, especially in the United States; a further escalation of protectionism; a harder-than-expected economic landing in China; and a return of tensions in the euro zone, triggered by concerns over the fate of Italian finances. All or any could intensify a slowdown that has started already.

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