• 2019 saw growth slow, recession fears increase and the US trade wars ramp up, but solid investment returns as monetary policy eased and bond yields fell
• 2020 is likely to see global growth pick up with monetary policy remaining easy
• US: Economy is slowing
• German weakness could affect Eurozone growth
• UK weakness is widening
• Cloudy outlook for Japan economy
• China feeling the impact of the trade war
• ASEAN-5: Mega trade deal could boost ASEAN’s long-term potential.
• Malaysia: Moderate growth in 2020

Slower growth in 2019

The global and US economies manoeuvred around tariff headwinds and structural challenges in 2019, albeit at a slower pace. The slowdown this year has led to concerns that the US economy might contract. Although global growth has slowed this year, there are some signs the worst may be behind us. The big global negatives of 2019 were:

• The trade war and escalating US-China tensions generally. A trade truce and talks collapsed several times leading to a new ratcheting up of tariffs before new talks into year end.

• Middle East tensions flared periodically but without a lasting global impact & the Brexit saga dragged on although a near-term hard Brexit looks to have been avoided.
• Slowing growth in China to 6%. This largely reflected an earlier credit tightening, but the trade war also impacted.
• Slowing global growth as the trade war depressed investment & combined with an inventory downturn and tougher auto emissions to weigh on manufacturing & profits.
• Recession obsession with “inverted yield curves” –  many saw the growth slowdown as turning into a recession.

Source: BIMB Securities Research - 17 Dec 2019