Overview of the economic situation Q1-2019
Despite being in a favourable economic cycle (global growth still above 3%), GDP estimates are being revised downwards (IMF, OECD, European Commission, etc.).
The striking main causes: economic cycle phase change, trade slowdown, Trump’s protectionism, monetary policy normalisation, political tensions stemming from populism (Brexit, Italy, etc.) and worse economic expectations in China and Germany.
The growth of world GDP exhibits less synchronisation than in January 2018. In advanced economies, the US expands at rates above 2%, supported by fiscal stimuli and an unemployment rate at record lows. In contrast, the EU loses strength due to the uncertainty associated with Brexit & Italy and the consequences of the trade war having a greater impact on the German external sector.
In emerging markets, on the one hand, given their high levels of debt, the evolution of their growth and inflation rates depend on the rise in US interest rates and the unfolding of oil prices. On the other hand, the financial instability resulting from the near end of the economic cycle and lower prospects for the growth in corporate profits in 2019 worry the financial markets, manifested through an increase in volatility.