Markets vs. Economists: Scotiabank Economics Global Outlook

Thursday, January 17, 2019

by Scotiabank

TORONTO - Global growth is moderating and coming off peaks achieved in 2017-18. This long predicted development reflects in part tightening by central banks, a natural cooling of the pace of growth, and the impacts of elevated uncertainty owing to developments in financial markets and the evolution of the China-US trade war.

"The decline in equity markets and movements in certain parts of the yield curve over the last few months suggests a clear disconnect between economic prospects as evaluated by markets and those forecast by economists," said Jean-François Perrault, Senior Vice President and Chief Economist at Scotiabank. "As the risk landscape improves in the first months of 2019, the underlying strength and resilience of the global economy will become more apparent, and central banks that were in tightening mode will resume doing so."

Highlights of Scotiabank's Global Outlook include:

  • Canada: Growth is expected to slow modestly to 1.8% during 2019 before rising to 2.0% in 2020.
  • United States: U.S. economic growth is forecast to slow to 2.4% in 2019, before slowing further to 1.7% in 2020.
  • Mexico: Policies implemented thus far by the new government have led to a markdown in growth to 1.6% in 2019, with growth expected to rebound to 2.3% in 2020.
  • United Kingdom: We assume a hard Brexit is avoided, allowing the UK economy to grow by 1.5% in 2019 and 2020.
  • Latin America: Growth is expected to accelerate or remain quite strong in Peru, Colombia and Chile.
  • China: China's economic growth continues to slow on the back of a trade dispute with the US, authorities' deleveraging efforts, and ongoing structural changes in the economy.

Read Scotiabank's Global Outlook online at: Markets vs. Economists.

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 97,000 employees and assets of $998 billion (as at October 31, 2018), Scotiabank trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS). For more information, please visit and follow us on Twitter @ScotiabankViews.

SOURCE Scotiabank

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