【英文】高盛报告：2020年全球经济展望Global Economics Analyst A Break in the Clouds（22P）

A year ago, we predicted a slowdown in global growth from 3.8% in 2017-2018 to 3.5% in 2019, with deceleration relatively evenly spread across the major economies. There were two main demand-side reasons for this call, namely 1) reduced US fifiscal stimulus and 2) tighter fifinancial conditions.  In the event, the global economy slowed more sharply than we had anticipated. Exhibit 2 plots the 2019 GS and consensus growth forecast against the most recent consensus estimate (which should by now be fairly close to the ultimate print). We have seen negative surprises concentrated in Europe—especially Germany—, Australia, and several large EM economies such as Argentina, Brazil, Mexico, India, and South Africa. By contrast, a few other large economies—especially China and the US—saw growth relatively close to expectations, and a number of EM economies in Central and Eastern Europe actually beat forecasts.

The downside surprises of 2019 were greater than suggested by the growth numbers alone, because these came despite the cushioning effects of a much lower than expected interest rate path. In particular, the Federal Reserve cut the funds rate three times in 2019, compared with its own forecast of three hikes and our forecast of four hikes as of a year ago. Many other central banks in both DM and EM countries followed suit.  The 2018-19 slowdown has taken global growth from clearly above potential in 2018 to roughly a potential pace in 2019. In fact, the latest high-frequency GDP and CAI numbers are below potential in a majority of economies, as shown in Exhibit 3. This means that the unemployment rate—in DM and those EM countries that produce reliable labor market statistics—will start trending higher unless growth picks up from the latest sequential pace.

What lies behind this year’s weakness? Our answer is a succession of negative shocks to fifinancial markets and business confifidence. The starting point was the sharp selloff in global risk assets in the fourth quarter of 2018, driven by the combination of negative data surprises in China and Europe coupled with a perceived hawkish Fed policy shock, encapsulated in Fed Chair Powell’s “long way from neutral” comment in early October. As shown in Exhibit 4, the resulting 100bp tightening in our US FCI in Q4 was the largest quarterly tightening outside the fifinancial crisis, and it led to a sharp slowdown in US and global aggregate demand growth in late 2018 and early 2019.