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Scotiabank Economics Q4 Global Economic Outlook Report: A Most Uncertain World

TORONTO, Oct. 10, 2019 /CNW/ - Scotiabank Economics today published its Q4 Global Economic Outlook report. This comprehensive report explores the effects of US trade policies on global business spending for the remainder of 2019 and into 2020.

"There are now clear signs that Trump's trade policies, along with a raft of other Trump-related developments, are leading to a pull-back in global business spending," said Jean-François Perrault, Senior Vice President and Chief Economist at Scotiabank. "Nowhere is this more evident than in the manufacturing industries, where global manufacturing PMIs are in contractionary territory, mirroring the global slowdown in trade and industrial production.

"The good news in all of this is that we still think it is relatively easy for President Trump to reverse some of the damage he has so far caused," he continued. "A deal with China and less aggressive posturing on trade would have immediate positive impacts on sentiment and markets."

Highlights of Scotiabank's Q4 Global Economic Outlook include:

  • Canada: Growth should accelerate modestly next year if there is no further increase in trade-related uncertainty. Though risks of a recession exist, we do not think we are headed for a period of protracted weakness. That view could change if uncertainty rises significantly.
  • United States: Growth is moderating as the damage from erratic and misguided policymaking sets in, but neither secular stagnation nor stagflation are looming on the horizon and the economy remains supported by the still-buoyant US consumer.
  • Canada & US Monetary Policy: We forecast that both the Bank of Canada and the US Federal Reserve will cut key interest rates twice (50 bps total) through the first quarter of 2020 and hold rates at 1.25% and 1.50%, respectively, through our forecast horizon.
  • United Kingdom: We expect the economy in the UK will move sideways until Brexit is resolved, with a shallow pick-up taking hold in late 2020 and into 2021.
  • Eurozone: Our forecast calls for Eurozone inflation to remain below the ECB's nearly 2% target into 2021. We expect growth to remain middling over this period, with risks to the downside stemming from a re-opening of Europe's trade tensions with the US.
  • China: Downward pressure is intensifying and the US-China trade war is adversely impacting the Chinese manufacturing sector and the country's exporters.
  • Commodities: Softer macroeconomic conditions and steadily-worsening trade tensions have markets on the defensive. Industrial commodity prices have waned amidst lowered demand expectations while gold prices have boomed.

Read Scotiabank's Global Outlook online here.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues. Follow this research on Twitter at @ScotiaEconomics.

About Scotiabank

Scotiabank is Canada's international bank and a leading financial services provider in the Americas. We are dedicated to helping our more than 25 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With a team of more than 100,000 employees and assets of over $1 trillion (as at July 31, 2019), Scotiabank trades on the Toronto Stock Exchange (TSX:BNS - News) and New York Stock Exchange (NYSE:BNS - News). For more information, please visit and follow us on Twitter @ScotiabankViews.

SOURCE Scotiabank

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