Global economic prospects: downturn to spur monetary policy loosening

Each month Oxford Economics’ team of 250 economists updates its baseline global economic outlook using the Global Economic Model, the only fully integrated economic forecasting framework of its kind.

July - August 2019

  • A global slowdown is continuing and risks are rising that this year will see the weakest world growth in the post-crisis period. But with central banks set to turn dovish words into action soon, recession risks are still low.
  • We see two US rate cuts in Q3 and another in Q1, 2020. We also expect a cut later this year from the European Central Bank, which may well also resume QE.
  • Lower US rates and a 2020 US slowdown may eventually weaken the dollar, but this will not be a major fillip. We forecast 2019 global growth of 2.7% rising to 2.8% in 2020 in response to the loosening in monetary policy.

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