Global economic outlook
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The global economy looks set to move into a lower gear as both advanced and emerging economies will find it hard to extend their recent robust economic performance into 2019. The temporary (90-day) truce between the U.S. and China is a positive outcome for those directly or indirectly affected by the tit-for-tat protectionist moves. Yet the possibility of renewed escalation remains high. We expect the Trump administration to eventually hike the tariff rates to 25% on $200 billion worth of Chinese imports. Oil has been in the news over the past few weeks. The commodity has witnessed a dramatic sell-off thanks to sanction exemptions to Iran’s biggest customers, rising uncertainty about global demand and the soaring U.S. shale supply. Lower oil prices, if sustained, could boost consumers’ purchasing power. It also could pose challenges for those central banks already struggling to achieve their inflation objectives. Oil producers will try to rebalance the market by reducing output
