Understanding global growth in 2020

The starting point is the weak growth in global trade, linked to the regionalisation of value chains and the transformation of the world into a service economy. This means that different regions’ cycles are out of sync (their growth rates can be different without being correlated by foreign trade) and that growth then depends on the vigour of domestic demand. We then see countries where domestic demand is driving growth (United States, euro zone, South-East Asia), thanks either to expansionary economic policies and rising participation rate s (United States, euro zone), or to technological progress, investment and increasing human capital (South-East Asia). We also see countries where domestic demand is weakening: China (due to the saturation of needs and the deterioration in companies’ financial situation), emerging countries with low savings where domestic demand is slowing down in order to wipe out the external deficit that can no longer be financed (Argentina, Brazil, South Africa, Turkey, India).