The global economy's sharp loss of speed through 2018 has left the pace of expansion the weakest since the GFC a decade ago
The reasons for hope? The Federal Reserve's decision to pause its interest-rate hikes, a US-China trade truce and the fading of the shocks that battered Europe in 2018 could mean stabilisation is around the corner. Other central banks have also stepped up, with the European Central Bank last week announcing new measures to help the economy through the current weakness.
But the global economy is not out of the woods. The OECD's latest composite leading indicator - published on Monday - indicates easing momentum in the US, the UK, Canada, and the euro area as a whole, including Germany and Italy. There are, however, signs of stabilisation in China.Despite the gloom, ECB policy makers have been keen to put a brave face on the deterioration, pushing the view the euro zone is experiencing a slowdown, not a recession.
"It will take longer for inflation to reach our objective, but it will get there. We are reacting to the developments we have seen so far.""The cyclical upswing that took hold of the global economy in mid-2017 was never going to last. Even so, the extent of the slowdown since late last year has surprised many economists, including us."There has been a modest pickup in some economic numbers recently, though also high-profile disappointments.
Last week, the US reported employers added the fewest jobs in more than two years. There may have been one-off factors to blame, but the scale of the miss puts in focus the idea that the economy's losing steam. In Germany, industrial output unexpectedly fell in January, though a large upward revision to December nullified some of the gloom. A manufacturing index points to an extended slump, and production has posted year-on-year declines three months in a row.
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