Global economy: indications that is no longer accelerating - Wells Fargo

According to analysts from Wells Fargo, there are signals that the global economy is no longer accelerating but the don’t see a significant slowdown in the foreseeable future.

Key Quotes:

“Global GDP grew 3.8 percent last year, its strongest year since 2011, but there are indications that the global economy is no longer accelerating. Sequential rates of growth slowed in most major economies in Q1-2018. Although global economic growth may ease back somewhat—we look for global GDP to grow close to its long-run average of 3.5 percent per annum in both 2018 and 2019—a significant slowdown does not seem likely, at least not in the foreseeable future.”

“Monetary and fiscal policies in most major economies of the world are simply not restrictive at present. In our view, it would require some sort of shock to bring about a meaningful slowdown. But therein lies the rub. There are a number of potential geopolitical events that could impart a significant slowing effect on the global economy.”

“Absent some meaningful shock, whether via a trade war or some other unforeseen event, the global economy should continue to enjoy solid growth. As noted above, global GDP grew 3.8 percent last year, and we look for it to expand near it long-run average of 3.5 percent in both 2018 and 2019. In that environment, we look for most major central banks to gradually normalize their policy stances in coming quarters.”