State of the economy: September 2019

Report produced tri-annually by the Chief Economic Adviser to provide a picture of the Scottish economy in an international context.


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.

IMF: Annual GDP Growth and Forecast

World Trade - Volume and Uncertainty

International Equity Indices

GDP Growth (%) Estimate Projections Revisions from April 2019
IMF WEO (July 2019) 2018 2019 2020 2019 2020
World Output 3.6 3.2 3.5 -0.1 -0.1
Advanced Economies 2.2 1.9 1.7 0.1 0.0
United States 2.9 2.6 1.9 0.3 0.0
Euro Area 1.9 1.3 1.6 0.0 0.1
United Kingdom 1.4 1.3 1.4 0.1 0.0
Japan 0.8 0.9 0.4 -0.1 -0.1
Emerging Markets and Developing Economies 4.5 4.1 4.7 -0.3 -0.1
China 6.6 6.2 6.0 -0.1 -0.1
India 6.8 7.0 7.2 -0.3 -0.3
Brazil 1.1 0.8 2.4 -1.3 -0.1
Russia 2.3 1.2 1.9 -0.4 0.2
South Africa 0.8 0.7 1.1 -0.5 -0.4

Contact

Email: OCEABusiness@gov.scot

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