November 14, 2018: The global economy is projected to expand at more than 3% in early 2019, with growth showing signs of peaking especially in the Euro area and emerging markets, a U.S. research organization said.
The world's economic growth, which stands at 3.2% for 2018, will be slightly down to 3.1% in 2019, according to the latest Global Economic Outlook of the New York-based Conference Board.
“The global economy will remain strong through the next half year – with no signs of a downturn – assuming there are no major policy disruptions such as a widespread escalation in tariffs on trade,” said Bart van Ark, chief economist of the Conference Board.
“But business cycles are maturing in most economies and growth rates are gradually reverting to slower trends in the medium-term,” he said, adding that the slower growth of labor supply and modest projections of productivity growth are the main concerns.
The report provides projections for the output growth of the world economy, including 11 major regions and individual estimates for 33 mature and 36 emerging market economies for 2019-2023 and 2024-2028.
Mature economies are predicted to grow by 2.4% in 2019, unchanged from 2018, though with significant differences across regions, the report said.
The research group expected the U.S. economy to grow at 3.2% in 2019 from 3.1% this year, before returning to its longer-term potential of just above two%.
“Short-term growth remains strong on the back of fiscal stimulus and strong business and consumer confidence. This will fade in the course of 2019 with rising interest rates, as the fiscal stimulus will have run its course and labor and capacity constraints become more apparent,” the report said.
Europe's economies are expected to grow 1.9% on average in 2019, down from 2.1% in 2018 and 2.4% in 2017.
“The slowdown is mostly the result of weaker global trade in the short-term,” the Conference Board said, and from a longer-term perspective, supply-side factors such as labor, capital and productivity will push down growth rates towards 1.4% in the next decade.
Emerging markets, on the other hand, are projected to grow by 3.7% in 2019, slightly down from 2018 but higher than that of mature economies.