EUR 4.00 For Business Accounts Only

NSR H1 20 - Global - After a slowdown in 2019, 2020 growth receives a timely boost

• Over the next few days, we will feature excerpts from our core strategy document – The Nigeria Strategy Report. The report communicates  key happenings in global and domestic financial markets over 2019 and provides our insight on what we believe will be the major themes underpinning investor sentiment over 2020. We begin the series with a look at key happenings that dominated the global economic and financial landscape in 2019 as well as our outlook for 2020.
• The trade rhetoric between the two belligerents, political uncertainty in U.K and idiosyncratic issues in the emerging markets dampened global economic activities over 2019. Consequently, global growth for FY 19 is poised to moderate to 3% (FY18: 3.6% YoY) stemming from a slowdown in both advanced and emerging markets. In the advanced economies, the effect of the US-China trade war on external sector and domestic demand, as well as dampened business investment in the U.K borne out of BREXIT uncertainty, forms the basis for a slowdown. Accordingly, growth in advanced economies is expected to slow to 1.7% YoY (FY 18: 2.3%). With the impact of the trade war filtering into emerging markets and the proliferation of country specific issues, such as a fall in consumption in India and a contraction in Mexico’s industrial sector, growth in the region is expected to fall to 3.9% YoY (FY18: 4.5%).
• According to the IMF, global growth over FY20 is expected to pick up slightly to 3.4%. Just like FY19, this will be driven by emerging markets where growth is predicted to print at 4.6% as expansionary monetary policies spur faster growth in the powerhouse economies of India and Brazil. Growth in the advanced economies, meanwhile, is expected to remain flat at 1.7% as improvements in the UK and the EU are dampened by slower growth in Japan and the US. In our view, recent developments dictate that an upward revision to these estimates may be warranted. The agreement of an initial trade deal between the US and China should ease the strain on global demand and provide a boon to a number of economies. Additionally, Boris Johnson’s resounding victory at the UK’s general election reduces the Brexit related uncertainty that has plagued the UK, and to a lesser extent the EU.