Page 12 - Taking Stock 22 Summer 2019

Summer 2019 Taking Stock Themes and strategies for 2019 Key themes GLOBAL GROWTH SLOWS BUT REMAINS SOLID History will likely show that 2018 was the peak for GDP growth in the current economic cycle. While growth is expected to be softer in 2019, we don’t anticipate a signi cant slowdown. Importantly, we expect all major developed economies (US, Japan, Eurozone) will still be growing ahead of their respective trend rates, though it will be a close call in Europe. It’s important to remember that economic expansions do not die of old age. There is usually something that triggers a sharp slowdown or recession, and right now there are no recession indicators ashing red. In the US, the impact of scal stimulus fades but strong growth in labour income will continue to support solid growth in activity. In Europe, industrial activity is slowing but consumers are expected to remain resilient. Emerging market growth is expected to remain largely stable as slower growth in China is offset by stronger growth in India. Overall, we expect global GDP growth of 3.5% in 2019, down from 3.7% in 2018. 12