Market Commentary

World GDP growth to hit 8-year low

Posted by Anton Murray Consulting on . Posted in Market Commentary


The outlook for the global economy has eroded significantly due to escalation in the US-China trade war according to Fitch Ratings, with the credit agency now forecasting world growth to fall next year to the lowest rate since 2012. In its latest Global Economic Outlook, Fitch has predicted world GDP growth will be reduced to 2.6 per cent for 2019, going down further to 2.5 per cent in 2020. The forecasts are a fair drop from last year’s GDP growth figure of 3.2 per cent, the 0.6 per cent fall in growth would be the largest decline since 2011.

The annual average growth was 3 per cent during 2014 to 2018. Fitch has updated its outlook from June in light of the recent escalation of the US-China trade war, which has “severely damaged the outlook for world trade and business sentiment,” the report noted. The new US tariff measures introduced in the last three months amount to an additional US$55 billion to US$60 billion of US taxes on Chinese imports – equivalent to 75 per cent of the shock Fitch had previously estimated for a worse-case scenario in its June analysis.

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