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Global economic activity remains solid but has already reached its peak, according to economists polled by Reuters who expect that protectionist policies that show no signs of easing , significantly affect the trade.
While the conflicts between the United States and other important partners in particular China have so far had a modest impact on world trade and the global economy, ] turbulence in the financial markets suggests that confidence has been affected.
Global equities have been affected by several liquidations in recent weeks. The dollar has risen 5% since April because of these concerns and still solid expectations of several further interest rate increases from the Federal Reserve this year and the following year. next year.
Reuters polls on economists, money market analysts, bond markets and stock market strategists over the last few months have been alarming and the US government bond market is also approaching a milestone who could recession .
In the latest polls by Reuters this month, nearly three-quarters of the 150 economists who responded to a supplementary question said that trade protectionism would be a major drag on global growth year-over-year. next.
This conclusion is based on the trade barriers already raised and the threat of Donald Trump of imposing additional duties on products imported from China for a value of 500 thousand millions of dollars, which will probably worsen this feeling.
"It is unlikely that the protectionist measures announced up to now have a strong negative impact on growth but we are deeply concerned about a possible escalation of the trade conflict," said Marco Valli, head of UniCredit macro search.
"As a result, the balance of risk for the global economy is changing significantly downward," he added.
The analysis of the latest Reuters polls of more than 500 economists and covering about 40 countries shows, according to their estimates, that the growth of most large economies have already peaked.
The average global economic expansion for this year and 2019 was forecast at 3.8% and 3.7%, respectively, based on the contributions of more than 70 economists.
Although this has not changed since a study published three months ago, it is below the projections of the International Monetary Fund.
"The direct effects of higher tariffs are not expected to have a significant impact on global growth ," writes Neville Hill, co-director of the global economy at Credit Suisse.
"But we remain concerned that uncertainty could have a chilling effect on business investment, which remains a key driver of global growth, important being given a global economy with differences in growth momentum and political risks, "he said.
Economic growth in the United States, which has probably reached an annualized rate of 4.1% in the last quarter, would lose momentum in the next quarter and fall to half that rate. from here the end of 2019.
It is also expected that economic growth in the eurozone, Germany, France, Italy, Great Britain, Japan and China will slow down this year and the next.
Even India, which is expected to remain the fastest growing economy this year, could not match the 7.7% rate recorded last quarter.
Central Banks
While central bank authorities remain cautious about uncertainty caused by trade war and slowing growth policy adjustment should always be on the agenda before the next downturn.
Despite the recent rise in oil prices, analysts expected inflation to remain moderate and the interest rate outlook in most major economies remained virtually unchanged. report to three months ago.
The Fed should go ahead as planned with two new rate hikes this year and two next year. The European Central Bank is still on track to end its revival from 1945 to 003, the era of the crisis by the end of 2018 and to raise interest rates. here a year or a little longer. The Bank of England is expected to raise rates in August.
The dilemma for the big central banks is the need to get out of almost a decade of stimulus without slowing economic growth and thus bringing the next recession closer together.
The median probability of a recession in the United States over the next two years was 35%, as against 30% in Britain and 25% in the euro area.
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