Slowdown on the horizon

Despite some weakness in the first quarter, and concerns about protectionism, global economic growth is likely to hold up well this year. In advanced economies, the outlook for investment and household consumption is fairly bright. Tightening labour markets are putting some upward pressure on wages, but the ECB and BoJ will be in no hurry to tighten policy. In contrast, we expect rising price pressures to prompt the Fed to raise rates five more times by mid-2019, which will contribute to a sharp slowdown there next year. With China also losing momentum, global economic growth is set to slow in 2019 and 2020.