The global economy remains fairly sluggish. Political risks from Brexit to impeachment of the U.S. President and associated trade tensions remain elevated. In addition, the recent attack on Saudi Arabian oil assets heightens risks in the Middle East and to the global energy supply chain. However, the policy response to declining growth and elevated risks from key policy makers is supportive, with key central banks in the U.S. and Europe electing to ease financial conditions recently with the aim of boosting growth.
However, despite a gloomy outlook, the Organisation for Economic Cooperation and Development (OECD) estimates positive growth for 2019 and 2020 based on their September forecast. Yes, global growth is likely lower than last year, and forecasts are coming down, but aside from known economic trouble spots such as Argentina and Turkey most major countries are expected to continue to grow this year and next. China and India remain the fastest growing of the major economies. The U.K. is expected to post relatively weaker growth in 2019 of around 1%.
As such, there are reasons for concern and clear risks are present. Yet, policy makers are reacting, and the estimates of global growth currently appears more robust than some more dour forecasts would suggest.