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World Economy Winter 2018 - Slower growth in the world economy

Klaus-Jürgen Gern, Philipp Hauber, Stefan Kooths, Saskia Mösle and Ulrich Stolzenburg

No 49, Kiel Institute Economic Outlook from Kiel Institute for the World Economy (IfW)

Abstract: World economic growth is moderating accompanied by a broad-based deterioration in economic sentiment. Following a temporary pick up in the second quarter, global activity slowed down significantly in the third quarter and sentiment indicators point towards a further deceleration towards the end of the year. Increased uncertainty from global trade conflicts and the tightening of monetary policy in the US that has put emerging economies under pressure have likely contributed to this development. We expect the global economy to expand at a rate of 3.7 percent this year, followed by 3.4 next year. This is a slight downward revision for 2018 and 2019 by 0.1 percentage points compared to our September forecast. For 2020, we continue to expect world production to increase by 3.4 percent. The escalation of trade conflicts, the possibility of a 'hard Brexit', doubts about the sustainability of Italian public debt, and a delay of reforms in France pose downside risks to our outlook.

Keywords: advanced economies; emerging economies; monetary policy; global outlook; fiscal policy; trade conflict (search for similar items in EconPapers)
Date: 2018
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