The OECD Economic Outlook for the first half of 2009, released on May 21, 2019, points out that sustained trade tensions have led to a marked decline in economic growth momentum, with global economic growth expected to slow to 3.2% in 2019 and 3.4% in 2020. The World Bank (WB) Global Economic Outlook of 2019 reports that the process of global economic integration may slow down or retrogress, with global growth falling from 3% in 2018 to 2.9% in 2019, but not into recession. The latest World Economic Outlook Report issued by the International Monetary Fund (IMF) on April 9, 2019, lowered the global economic growth forecast for 2019 to 3.3%, 0.2 percentage points lower than the forecast for January this year.
The WB report says the downside risks of the global economy are increasing due to the weakening momentum of developed countries and the deterioration of development conditions facing developing countries. More recently, the huge fiscal deficit and the failure of stimulus policies will slow down the growth of advanced economies. Including the possibility that global trade disputes will lead to weak commodity prices, financing conditions will suddenly tighten, and the growth rate of developed economies is expected to fall to 2% in 2019. Growth rates of emerging and developing economies will stagnate. 4.2%. WB also pointed out that there are two major risks restricting the global economic recovery: one is possible escalation of trade tensions; the other is fragile international financial markets. Especially low-level developing countries have higher debt levels in recent years, which makes the public debt of these countries continue to increase. In the context of rising global interest rates, shifting investor sentiment or exchange rate volatility, the situation is even more fragile. The report points out that in the past four years, the proportion of government debt to GDP in low-income countries has increased from 30% to 50%, and that future debt-servicing pressures will increase further.
Specifically for countries and regions, the United Nations (UK) World Economic Situation and Prospects 2019 report points out that with the weakening of the impetus of fiscal stimulus measures in 2018, U.S. economic growth is expected to slow to 2.5% in 2019 and to 2% in 2020. The EU economy is expected to grow steadily at a rate of 2%, despite downside risks, including the possible impact of withdrawal. China's economic growth will slow from 6.6% in 2018 to 6.3% in 2019, with policy support offsetting some of the negative effects of trade tensions. OECD also believes that China's economic growth rate is expected to slow down all but remain strong against the backdrop of rising global uncertainty. The IMF also raised China's economic growth forecast from 6.2% to 6.3% in 2019.
The United Nations report further points out that although tensions have had a significant impact on certain sectors, stimulus measures and direct subsidies have so far offset the direct economic impact on most of China and ASEAN countries, as well as the United States. But the long-term escalation of trade tensions could seriously disrupt the global economy. Industries directly affected have witnessed rising input prices and delays in investment decisions. These impacts are expected to spread through global value chains, especially in East Asia. Slowing growth in China and the United States may also reduce demand for commodities, affecting commodity exports in Africa and Latin America.