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Global growth slowed noticeably in Q3 – NAB

Analysts at NAB note that global growth has slowed noticeably in Q3 after four quarters of fairly stable growth as it slipped to 3.6% yoy.

Key Quotes

“Emerging markets were the main driver of this slowdown, led by India and East Asia (excluding China).”

“Turbulence in financial markets has increased in recent times, reflecting concerns around the outlook for major economies, as well as risks related to the US-China trade dispute, Brexit and the Italian-European Commission budget dispute. Equity and commodity markets have exhibited considerable volatility and this, together with the slowdown in global growth, has contributed to doubts around the global monetary policy outlook.”

“Our forecasts for global economic growth are unchanged – increasing by 3.7% in 2018 before slowing to 3.6% in 2019 and 3.5% in 2020 (the long term trend rate of growth). This slowdown should largely occur in the advanced economies, as US fiscal stimulus fades, monetary policy continues to tighten and supply side constraints become more binding. That said, the weakness in growth in Q3, while in line with our forecast for 2019, highlights some downside risk to this outlook.”

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