Global economic growth remains strong but has passed its recent peak and faces growing risks, including from escalating trade disputes and tightening financial conditions, according to the latest economic outlook by the Organisation for Economic Co-operation and Development (OECD).
Growth forecasts for next year have been revised down for most of the world’s major economies. Global gross domestic product is now anticipated to expand by 3.5 per cent in 2019, compared with the 3.7 per cent forecast by the OECD last May.
The weaker outlook for 2019 reflects deteriorating prospects, principally in emerging markets such as Turkey, Argentina and Brazil, while that for 2020 is more a consequence of developments in advanced economies as slower trade and the withdrawal of fiscal and monetary support take their toll.
In the meantime, survey figures from financial data provider IHS Markit showed last week that confidence among British businesses plummeted to its lowest level in nine years during the third quarter.
In the meantime, households’ perception of their financial conditions sank to a five-month low, amid uncertainty over Brexit and a no-deal outcome in Britain’s negotiation with the EU.
The net balance of businesses expecting a rise in business activity in the coming 12 months was +32, down from +39 in June. Optimism peaked at +66 in February 2014.
On the other hand, a measure of households’ overall assessment of their financial wellbeing fell to 44.5 in November from 45.0 in the prior month, the highest degree of pessimism since June.
Finally in the US, homebuilding rose in October amid a rebound in multi-family housing projects, according to a report released by the Commerce Department. However construction of single-family homes fell for a second month in a row, signalling that the housing market remained vulnerable to higher mortgage rates.
The Commerce Department said that housing starts soared by 1.5 per cent in October after plunging by 5.5 per cent in September.
Other aspects of the report were also soft. House building permits declined last month and homebuilding completions were the fewest in a year.
This report was compiled by Bank of Valletta for general information purposes only.