menu
 
Economics Commentary

Global Macro Outlook - April 2019

10 April 2019
2 min read

What You Need to Know

Our experienced global team of economists offers its latest perspective on the world economy. Included are regional and country forecasts for growth, inflation and interest rates, updates on central bank and fiscal policies, and the upside and downside risks that could change the trajectory.

Download PDF

Key Forecast Trends

  • Last month, we wrote that three of the key controversies shaping the global outlook were moving in a favourable direction. That's still the case today: the Fed's on hold, China's growth risks are receding, and a USChina trade deal seems to be in the pipeline.
  • That leaves Europe, where recent manufacturing data have fuelled investor concerns that the economy might be slipping into recession. We don't agree, in part because Chinese stimulus should benefit Europe's export-dependent economies.
  • But investors may also be too pessimistic on domestic-demand growth in the euro area. Job and wage growth remain strong, inflation is falling, and recent data suggest that European consumers had a strong first quarter.
  • Don't get us wrong: a material acceleration in European growth remains unlikely. But we're growing more hopeful that the worst of the slowdown is over. And if that's right it should help keep risk assets on a firmer footing.

Outlook

  • Our first estimate for global growth in 2020 is 2.7%, marginally higher than our most recent estimate for 2019 (2.6%) but the lowest first estimate for year-ahead growth we have published since 2010.
  • Looking at the major countries, we expect growth to slow slightly in the US (1.8% versus 2.0%) and China (6.0% versus 6.2%) and remain soft in the euro area (1.2% versus 1.1%) and Japan (0.5% versus 0.6%). None of these forecasts are materially different from consensus.
  • That's also the case for global inflation, which we expect to hold steady at 2.6% in 2020. But we do have a different take on the US, where we expect inflation to rise to 2.5% (consensus 2.2%).
  • Importantly, we think higher inflation is what the Fed wants and that US interest rates will now remain on hold until the end of 2020. That's also our view on the European Central Bank (ECB), where the near-term bias is probably tilted toward further easing.

Past performance, historical and current analyses, and expectations do not guarantee future results. There can be no assurance that any investment objectives will be achieved. The information contained here reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of the date of this publication. AllianceBernstein L.P. makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this publication. This document is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AB or its affiliates.

The views expressed herein do not constitute research, investment advice, or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

This information is for exclusive use of the wholesale person to whom it is provided and is not to be relied upon by any other person. It is not intended for retail or public use and may not be further distributed without prior written consent of ABAL.
This webpage has been prepared by AllianceBernstein Australia Limited (“ABAL”)—ABN 53 095 022 718, AFSL 230 698. Information in this webpage is only intended for persons that qualify as “wholesale clients,” as defined by the Financial Markets Conduct Act 2013’, and is not to be construed as advice. This webpage is provided solely for informational purposes and is not an offer to buy or sell securities. The information, forecasts and opinions set forth in this webpage have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither this webpage nor the information contained in it are intended to take the place of professional advice.
You should not take action on specific issues based on the information contained in this webpage without first obtaining professional advice. Past performance does not guarantee future results. Projections, although based on current information, may not be realized. Information, forecasts and opinions can change without notice and ABAL does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained in this webpage, ABAL does not warrant that this webpage is free from errors, inaccuracies or omissions. ABAL disclaims any liability for damage or loss arising from reliance upon any matter contained in this webpage except for statutory liability which cannot be excluded.
No reproduction of the materials on this webpage may be made without the express written permission of ABAL. This information is provided for persons in Australia only and is not being provided for the use of any person who is in any other country.

© AllianceBernstein L.P.