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Global Economic Outlook

FEBRUARY 2020

Click on the chart to browse forecasts by country and region

Stagnating growth and stalling globalization: How Big are the Risks?

The global economy experienced a major slowdown in 2019, and recession fears became widespread towards the end of the year. We argue that the risk of a larger downturn—while not absent—will be contained, and the global economy will likely return to its slow, long-term growth trend of 2.7 percent sooner rather than later. Indeed as initial signs of an easing in the downturn in the industrial cycle emerged, a phase one trade-deal between the US and China got signed, and consumers continued to show strength based on rising wages and low inflation rates, recession fears have begun to ebb.

Unexpectedly, however, a new downside risk has emerged through the COVID-19 crisis in China. It is very likely that this viral outbreak will severely hit China’s economy during the first quarter of 2020. Under the assumption that the number of new cases will subside before the end of February, we expect a rebound in subsequent months. However, as China’s economy is on a much slower growth path than in 2003 at the time of the SARS outbreak, we expect the rebound to be more modest as well. As a result, we adjusted our annual growth rate for China’s economy for all of 2020 downwards from 3.4 percent to 2.8 percent.

Under the “rapid containment” scenario the impact of the coronavirus outbreak on global GDP growth is quite modest—although bigger in Asia than elsewhere—and would still keep 2020 growth at 2.4 percent, slightly above of the 2019 estimate of 2.3 percent. Industrial production is likely to come back into positive territory, and businesses will continue to leverage innovation and digital transformation to grow top-line revenue and reduce costs to avoid a major squeeze on profits. The contribution of trade to global growth will continue to be a challenge, obviously exacerbated by the China crisis. In addition, businesses are shortening value chains by “trading up” and “going local.” Productivity growth is critical to make up for the slack of slower globalization and weaker growth of the global workforce in the years ahead.

View this infographic from the October 2019 release for a visual overview.

For members

  • To explore the Global Economic Outlook data, use the online data tool (including an option to download the data in excel format) available here.
  • Are you interested in getting in touch with our researchers behind the GEO model? Do you need someone to review your own growth model? If you would like to get in touch with us, please send an email to ted.geo@conference-board.org.

Publications (2019 release)

Past publications (2018 release)

Next update

The next quarterly update of The Conference Board’s Global Economic Outlook is scheduled for mid-April 2020 and will include a new StraightTalk publication.

US – Japan Business Leaders Forum on Productivity 2019

For Productivity Dialogue Among Top Business Leaders of Japan, the US, and Germany.
April 12, 2019 | NYC
1st Business Leaders’ Forum on Productivity

Straight Talk October 2019

StraightTalk®Global Economic Outlook 2020: Stagnating Growth and Stalling Globalization: What's Ahead?

Global Economic Outlook - Data & Methods
Contact

Abdul A. Erumban
Senior Economist

Klaas de Vries
Economist

ted.geo@conference-board.org