Bernstein: taking up world GDP growth 2020 from 2.2% to 2.4% – but “we are not out of the woods…”
“We have upgraded our 2020 global growth forecast to 2.4% from 2.2% to reflect more encouraging news on the trade-front, easier financial conditions and signs that manufacturing may be starting to stabilize.
It would, however, be premature to think that the global economy has turned a corner and that a synchronized upswing awaits. At 2.4%, our latest forecast for 2020 growth would represent one of the weakest performances since the global financial crisis. There are reasons for caution.
1. First, the cyclical backdrop remains fragile. Yes, many key manufacturing indicators have stabilized, but they have done so at levels consistent with contracting output growth.
2. Second, the secular backdrop remains challenging. Debt, demographics, sluggish productivity growth, populism and geopolitics continue to cast long shadows over the investment landscape.