Growth To Slow, But Carry On

Global Financemagazine editor Andrea Fiano's message to readers about what to expect in this month's issue.

December 2018 | VOL. 32 NO. 11

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The year-end season typically brings an abundance of forecasts. So far, at least judging from the US, those forecasts are mildly optimistic. There is a consensus about a global slowdown in the more advanced economies and emerging markets, but no expectation of recession in most economies—at least not in 2019.

Still, uncertainties abound. Oil and commodity prices can swing wildly. Serious Brexit deadlines loom yet none can say what shape Britain will take. Trade and tariff disputes, primarily between the US and China but also among other countries, seem to be growing.

Bart Van Ark, chief economist of the Conference Board, speaks of a “gradual global slowdown,” rather than ‘falling off a cliff’ next year—even if his optimism is tied primarily to the first half of the year. “A recession is not around the corner, even if the risks have increased,” Alan Levenson, chief US economist for mutual fund giant T.Rowe Price, boldly states.

Neal Shering, chief economist for Capital Economics, says that Germany and Japan’s recent dips into negative growth could signal a global slowdown but do not reflect trade tensions or recession. Even an IMF simulation shows that the impact of trade tensions on the US economy should be contained for next year, reaching a peak in 2020 that affects financial market and consumer confidence more than the real economy. On the other hand, volatility in the financial markets seems here to stay.

Our cover story on the sharing economy might seem at first unrelated to these forces, but it is not. It describes a new trend—one quite advanced among consumers and now being embraced by businesses—that is affecting productivity, employment, and, most of all, efficiency. This trend will have an effect on employment and on growth in the years to come.

Andrea Fiano | Editor