As the outlook for the world’s economic growth worsens, the British-based Economist Intelligence Unit has identified the global economy’s top 10 risks in 2019.
“Given concerns over slowing growth in key economies, including China and the EU, and the wider impact of the trade war between the US and China, the Economist Intelligence Unit expects global growth to decelerate from 2.9% in 2018 to 2.8% in 2019 and 2.6% in 2020.”
There were a number of risks in three key areas that could drive growth even lower than what was forecast in 2019 and 2020.
The top risk is that the US-China trade conflict becomes a full-blown trade war.
“China and the US have started negotiations to resolve the current trade dispute, and the US government has decided to suspend further increases in tariffs on $200 billion (R2.9 trillion) worth of Chinese goods. We believe that this is a temporary truce.”
Further risks include a US recession; a broad-based emerging-market crisis; China being hit by a prolonged economic downturn; a sharp rise in the oil price; and sovereignty disputes in the South or East China Sea, leading to an outbreak of hostilities.
The possibility of cyberattacks, along with data integrity concerns crippling the internet, is another risk that could have a severe impact on economic growth.
Among the low risks to the global economy included in the top 10 are a major military confrontation on the Korean peninsula; a disorderly no-deal Brexit; and an Italian banking crisis.