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November 29, 2019

Global Economy: Resilience to the fore

  • The United States (US) economy grew by 1.9% in the third quarter (Q3), marginally down from 2% in Q2, but better than the consensus forecast of ~1.5%
  • The euro area (EA) maintained its growth momentum, growing 0.2% in Q3, the same pace as in Q2, and higher than the consensus forecast of 0.1%
  • In Asia, Japanese economic growth slowed sharply in Q3, and latest data points indicate continued weakness in the Chinese economy

Yes, the global economy has been struggling, underlined by the International Monetary Fund revising downward its 2019 growth forecast to 3% from 3.3% last month. However, there may be some light at the end of the tunnel.


The two largest advanced economies, the US and EA grew at a pace, higher-than-expected by consensus forecasts, in Q3. Even amid the Brexit-related uncertainties, the United Kingdom (UK) avoided a recession (two consecutive quarters on negative growth) by growing positively in Q3 after having contracted in the previous quarter. Easing trade tensions between the US and China as the two sides work towards a partial trade deal should help allay the concerns on trade and investment-related uncertainties, benefiting the two economies and the global economy at large. Global growth should also get some support from the more accommodative monetary policies by major economies.


So, even as risks abound, things may be looking up.