2019 Outlook: Global markets

Three themes to watch in 2019

Dec 10, 2018 | Kristina Hooper

Key takeaways

  • We believe economic growth divergence is likely to continue to some extent.
  • Geopolitical disruption is leading to structural fragmentation.
  • The debt problem is widespread and is becoming more burden some as rates rise.

As we look out to 2019, we believe there are three key themes that will persist into the new year.

 

Theme #1:
Divergence
While we expect economic growth to remain solid, there has been greater divergence in the past year in terms of growth. We believe such growth divergence is likely to continue, yet it will probably be constrained by the strength of US consumption and investment (as well as the strength of Chinese stimulus), which is likely to help boost growth in the rest of the world to at least some degree. We also expect some divergence in inflation in the coming year, with some economies experiencing upward pressure on wages as well as rising input costs.

 

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