While we may be at a turning point for the better politically, the figures from recent months paint a picture of the global economy that is discouraging in the short term.
The tone was set by the World Bank’s Global Economic Prospects. This report, as worrying as its subtitle, “darkening economic outlook,” predicts a decline in growth for advanced economies (1.6% in 2020, compared to around 2.2% in 2018).
The European Central Bank (ECB) has sounded the alarm for the Eurozone economy. Between the prospect of a chaotic Brexit and rising protectionism (as seen with the trade war between the USA and China), Europe is facing increasingly marked uncertainties.
With the ECB having set its main interest rate at zero, it has little leeway to reduce it further. As for the Bank of England, since August it has not dared to raise its interest rates. Even the United States Federal Reserve has indicated it is slowing the pace of its rate hikes. Under these conditions, a new crisis would force advanced countries to grope for new monetary instruments.
This is particularly problematic because, after more than a decade spent fighting the crisis and recession, advanced countries are running low on ammunition to combat a slowdown.
