Major Economies Economic Forecast

Economic Snapshot for G7 Countries

March 4, 2020

Global economic growth is seen dipping slightly in 2020

Global economic growth is seen dipping slightly this year compared to last as the coronavirus weighs on momentum in H1, particularly in China. However, the “phase-one” U.S .-China trade deal should reduce global trade uncertainty to an extent. A possible worsening of the viral outbreak, a resurgence of U.S.-China tensions and social unrest in some countries pose downside risks.

Global Monetary & Financial Sector News

Global price pressures remain subdued due to moderate growth and weak oil prices, which have fallen sharply since the start of the year. The same factors will likely keep global inflation broadly unchanged through the rest of 2020, although certain Latin American and African countries will experience high inflation, and African swine fever should continue to fan price pressures in Asia.

The PBOC loosened its stance in recent weeks to fend off the impact of coronavirus, with several other Asian central banks following suit. G7 central banks have made no policy changes recently. Panelists see some further loosening in 2020, as central banks take advantage of generally mild inflation to support activity in the face of virus-induced uncertainty.

Over the last  month, the U.S. dollar has appreciated against other major currencies such as the CAD, CNY, EUR and GBP, but weakened against the JPY. Coronavirus fears boosting safe-haven demand, coupled with strong economic momentum, have likely underpinned the USD’s strength in recent weeks.

 


 

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