The economy is stabilising at a low level

Global GDP growth will decline for the third successive year in 2020 - our growth estimate (2.2 %) would be the lowest reading since the financial crisis. Nevertheless, the synchronous slowdown will end in 2020. In an environment marked by anaemic economic growth and weak inflation dynamics, central banks world-wide will loosen their monetary-policy stance further. In the absence of substantial recession risks, this will entail a continuation of the rally in higher-risk asset classes.

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A little must suffice - Outlook 2020 (2019/11/28)

After touching bottom at the turn of the year, the economy will gradually pick up during 2020. With support forthcoming from further rate cuts, this should boost higher-risk assets.

Clear & concise

  • Despite a renewed decline in growth, the synchronous downswing will end in 2020;
  • Moderate pick-up in growth over the year, exposed to (downside) risks;
  • The Fed and the ECB will both lower their policy rates at the beginning of the year;
  • Divergence between the economic cycle and the financial-market cycle is widening;
  • Regarding asset allocation, we recommend overweighting higher-risk assets.

Read more: A little must suffice - Outlook 2020