Given the increased friction over trade between the US, China and other countries around the world, concerns over global growth have been on the rise, and the latest revisions to global growth forecasts for countries in the OECD (Organisation for Economic Co-Operation and Development) reflect those concerns.
For the OECD as a whole, 2019 global GDP growth forecasts were cut from 2.12% in November to 1.78% now, marking a 36 basis point (bps) haircut. The map below shows the change in growth forecasts for each OECD country from November to now. Looking at the chart, there isn’t a whole lot of green. Besides the gray shading which indicates non-member OECD countries, most countries are colored in a shade of red to yellow. In fact, of the 45 countries shown, only six saw upgrades to their GDP growth forecasts, and none of the increases were all that significant as no country saw its growth forecast raised by more than 30 bps. On the downside, however, three countries (Turkey, Iceland, and Latvia) saw their growth forecasts slashed by more than a full percentage point, while another eleven saw growth estimates cut by more than half a percentage point! While no country saw an especially large increase in its growth forecasts, the US, which is by far the largest economy in the world, saw an upgrade to its growth forecast from 2.71% up to 2.82%. China, meanwhile, saw a cut in its GDP growth forecast from 6.2% down to 6.1%, a level of growth that most other global economies would kill for.
In the second chart below, we have zoomed in a bit on Europe since it is hard to see each country’s individual change in growth forecasts. For the region as a whole, growth forecasts were cut by a pretty sizable chunk, falling from 1.77% down to 1.22%. Countries in the Euro region that saw the largest downgrade to growth forecasts were Iceland, Latvia, Luxembourg, Italy, and Germany. Poland, Denmark, and Hungary were the only three countries that saw increases to global growth estimates. Start a two-week free trial to Bespoke Institutional to read more on international economies and the global macro backdrop.