Global Economic Outlook for Upcoming Year

Running head: BUSINESS ECONOMICS
Business Economics
Name of the Student
Name of the University
Student ID

1BUSINESS ECONOMICS
Table of Contents
Introduction................................................................................................................................2
Outlook for different macro indicators......................................................................................2
Outlook for GDP growth........................................................................................................3
Unemployment and outlook for labor market........................................................................4
Outlook for price level movement.........................................................................................5
Macroeconomic policies............................................................................................................5
Economic policies in advanced countries..............................................................................6
Economic policies in the emerging market and developing economies................................8
Conclusion..................................................................................................................................9
References................................................................................................................................11

2BUSINESS ECONOMICS
Introduction
The paper attempts to prepare a report consisting global economic outlook for
upcoming year. Global economic performance depends on the aggregate performance of
different macro variables such as growth in GDP, unemployment, inflation and other
associated indicators. Performance trend in the global economy indicates a gloomy picture
for future. There is tight condition in the global financial market. Despite strong trade relation
among different nations, trade tension has been escalated among some large nations. The
emerging market and developing economics are going through stress in the financial market.
Amid these headwinds, developing countries have lost the momentum for its economic
recovery. In the global market, acute risks have been developing with a disorderly function of
financial market and elevated trade tensions. Emerging and developing market economies
particularly the low-income nations are facing vulnerabilities from the risk of government
debt (worldbank.org 2018). Unfavorable weather condition leads to a shortage of food in
different nation accelerating global food prices. This may have a deeper impact on state of
global poverty. In order to counter several difficulties that prevent economic growth
government of a nation undertakes series of policy measures. Appropriateness of particular
policy depends internal and external macroeconomic environment. For some countries, there
is space for fiscal policy while in others there is larger room for monetary policy. Fiscal
policy now is more suitable for advanced countries while monetary policy is more suitable in
emerging market and developing economies. In addition to fiscal and monetary policy,
government adapts series of structural policies to enhance economic performance.
Outlook for different macro indicators
The combined performance of different macroeconomic indicators together
constitutes economic performance of a nation. Three primary indicators of economic

3BUSINESS ECONOMICS
performances include growth in GDP, movement in the inflation and unemployment rate
(Goodwin et al. 2015). Other variables influencing economic performance include movement
of exchange rate, trade balance, interest rate and others.
Outlook for GDP growth
Gross Domestic Product of a nation is a composite measure for estimating the value
of aggregate output. It computes the monetary values of all the final goods and services that a
country produces. Growth in GDP indicates percentage in aggregate output overtime. Trend
in GDP growth is used as a proxy measure for economic growth of a nation (Uribe and
Schmitt-Grohe 2017). Global economy was estimated to grow at a rate of 3.7 percent in 2018.
Economic growth is projected to fall to 3.5 percent in the next year before increasing to 3.6
percent in 2020 (imf.org 2019). The evidences of slow growth in the latter half of 2018 led to
a downward revision of growth projection for upcoming years. The pattern of economic
growth reflects a mixture of above trend growth for advanced economies and decline in
economic growth rate in emerging market and developing economies. Economic growth has
significantly contracted in Turkey and Argentina.
In advanced economies growth is projected to decline from 2.3 percent to 2.0 percent
between 2018 and 2019. Growth is projected to decline further to 1.7 percent in 2020. Slow
growth in advanced economies is mostly resulted from a decline in growth in Euro areas. In
the Euro areas, economic growth is projected to moderate to 1.6 percent in 2019 from earlier
1.8 percent in 2018. Germany has recorded a notable decline in economic growth. Slow
growth in Germany has been resulted from a decline in private consumption expenditure,
decline in industrial production due to revision in auto emission standard and restrained
foreign demand. The slow growth trend of Germany has been followed by that of France and
Italy (Mauro and Zilinsky 2015). Significant uncertainty has been associated with baseline