State of the economy: September 2019

Global Summary

Global activity remains subdued in 2019.

• Global growth slowed over the year to 3.6% in 2018 and has remained relatively subdued in the first half of 2019.
• Slower growth over the year has been relatively broad based in Advanced and Emerging Market & Developing Economies.
• The IMF forecast global growth to slow further in 2019 to 3.2% before picking up to 3.5% growth in 2020.

Global trade activity has weakened in 2019.

• Growth in world trade volumes has remained weak in 2019 amid heightened global trade tensions.
• The new Trade Uncertainty Index shows heightened uncertainty throughout 2019.
• Softening demand and trade has been reflected in global financial markets with equities growth easing during the year.

US economic growth slowed in Q2 2019.

• US GDP grew by 0.5% in Q2 2019 (2.3% annually), slowing from 0.8% growth in Q1 2019.
• US unemployment is at historically low levels, remaining at 3.7% between June and August 2019.
• US CPI inflation eased to 1.7% in August (1.8% in July), having fallen from its recent peak of 2.9% in 2018.
• The IMF forecast US GDP growth to slow across 2019 and 2020 to 2.6% and 1.9% respectively.

Euro Area unemployment remains low as GDP growth slows

• Euro Area GDP growth slowed in the second quarter of 2019 (0.2%, down from 0.4% in Q1) and grew 2.3% over the year.
• Euro Area unemployment was 7.5% in July, unchanged over the month and at the lowest rate recorded since mid-2008.
• Euro Area inflation remained stable at 1.0% in August having fallen from 2.1% over the year.
• The IMF forecast Euro Area GDP growth to slow further in 2019 to 1.3%, before picking up to 1.6% in 2020.
• The ECB revised down their Euro Area growth forecast for 2019 to 1.1% and announced renewed monetary stimulus.