In 2019, we expect the Indian economy to continue to be the global outperformer in terms of economic growth. There are however substantial downside risks, such as a defeat of Modi’s BJP in the general election and an escalation of the US-China trade war.
The disappointing recovery of the German car sector, the yellow vests in France and slowing external demand lead to a downward revision of our growth figures for 2018Q4 and 2019Q1.
The recent flattening of US treasury yield curve has activated our early warning system. Our model now gives a 69% chance of a recession by May 2020 and is increasingly pointing at 2020 as the year of the next recession.
The United Kingdom Parliament finally gets their turn on Brexit. In the evening of 15 January the MP’s will vote on the EU-UK deal and we expect that they will reject the current deal. That will push the UK into several weeks of political turbulence.
Economic Quarterly Report Dutch version
The Dutch economy is approaching its limits due to a tight labour market, while imported uncertainty is hindering business investment. This may be the last chance for policymakers to fix the roof while the sun is shining.
Special Dutch version
The US dollar has been the global anchor currency since 1944. This gives the US certain advantages, but it also brings negative consequences for international stability. The global economy needs a new anchor, independent from an individual country.
To preserve healthy economic growth rates in the medium term, the Spanish government should speed up the labour market recovery and deal with remaining challenges. Elections in 2019 could break the reform deadlock, but not necessarily in a positive way.
We have a deal, but are also closer than ever to a ‘hard Brexit’. The EU and the UK reached an agreement on the divorce conditions on 14 November. Now both the EU and the UK have to ratify the deal before 29 March 2019 to realise an orderly Brexit and start the transition period.