The global economy is in the late stage of the business cycle, which is typically characterized by increased risks and rising markets in the markets. This was reported by analysts Julius Baer.
Experts predict a rise in global GDP at the end of this year at a rate of 3.8% and a slowdown to 3.6% in 2019. The pace of economic growth in the United States will be 2.9% and 2.8% of the euro area, 2.1% and 1.7%.
As expected, China's GDP in 2018 will increase by 6.5%, next year – by 6.2%. The authorities of this country are implementing stimulative measures that will enable the continuation of economic restructuring and avoid rapid slowdown in growth, according to a Swiss bank report.
As operational statistics show, including PMI business indexes, the dynamics of economic growth in different countries are becoming increasingly unsynchronized. The United States remains a recovery locomotive, while there is a deterioration in performance in the euro area, while in developing countries, especially with high debt and structural problems, it is slowly slowing down.
"The world's largest central banks continue to show willingness to support financial markets, but this support will gradually weaken. The development of Asian countries, digital innovations, radically changed industries, the new energy industry deserve special attention as new investment strategies," the report said.
High business activity, the absence of inflationary pressure and a strong labor market allow the US Federal Reserve System (Fed) to maintain a policy of tightening monetary policy. In 2019, the US Central Bank will continue to raise the key exchange rate, which by the end of the year will be 3.5% per annum.
Next year, probably the first in a longer time-hardening of the credit conditions of the European Central Bank and the Bank of England, which will limit interest rates to 25 basis points – to 0.25% and 1% per year, experts say.
Financial markets are in the phase of changing the general trend, which is characterized by increased volatility.
The 35-year bullish trend ends in the US government bond market, but the prospects for a major downturn have not yet been noticed. At the same time, the correlation between US government bonds and stock indexes strives to zero: the movement of quotations of these two types of assets is becoming more and more unstable, as demonstrated by the volatility of the shares in October.
However, Julius Baer does not expect this situation to lead to an increase in yields of ten-year US Treasury to 4% per year.
In the next 12 months, oil prices will be in the corridor from $ 60 to $ 80 a barrel, they believe in the bank. Rising prices above this level will be limited by increasing supplies, primarily from shale manufacturers, while OPEC + policies will prevent high prices from falling.
"The major risks in the global economy are related to US policies, including trade disputes and deterioration of sanctions against Iran, budget problems in Italy, which pose a significant risk to the euro and the way out of the UK from the European Union, causing a chain reaction in emerging markets and cause a new big crisis, "the report said.
See also: The Cabinet of Ministers expects the IMF tranche to arrive in the coming weeks.
It is reported that the European Commission expects growth in the 19 eurozone countries to fall from a ten-year high of 2.4% in 2017 to 2.1% this year, and will continue to fall to 1.9% in 2019, 1, 7% in 2020. The same trend is expected in 27 EU countries, with a forecast of 2.2% in 2018, 2.0% in 2019 and 1.9% in 2020.