Global economic growth is set to pick up in 2020 despite the world’s two biggest economies slowing, according to asset manager Investec.
The world economy will expand 3.3 per cent in 2020, Investec said, picking up from a post-crisis low of 2.9 per cent growth this year.
Trade tensions, a slowdown in China, and difficulties in Eurozone manufacturing have all dented global economic growth in 2019.
The US-China trade war is likely to carry on into 2020, Investec said, holding back both countries’ economies. In China, growth is expected to be its lowest in 30 years next year.
The City firm said the two sides would likely sign “phase one” of a trade deal in 2020, although this would not be a comprehensive agreement.
“Our baseline case is that a ‘phase two’ deal will not be settled until after November’s [US] Presidential election,” said Investec chief economist Philip Shaw.
The report said the pick-up in global growth “primarily reflects” the economic stimulus that has resulted from 60 or so central banks cutting interest rates in 2019.
Investec also said some of the strengthening of global growth would come as a result of better performances from emerging economies such as India, Brazil, Russia and Turkey.
The asset manager became the latest group to predict that UK growth would be the worst since the financial crisis next year, with Investec foreseeing a 1.2 per cent expansion, down from 1.3 per cent this year.
“Uncertainty over a free trade agreement (FTA) with the EU may become a major factor as the year rolls on,” Shaw said.
Investec cautioned that its predictions could be blown off course in 2020, however. For example, its UK outlook depends on the outcome of the upcoming General Election, and the US-China trade talks could suffer a set-back.