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2019 marks a decade since the global financial crisis of 2008-09, with the world experiencing a significant economic shift since those troubled years. Global growth bounced back in 2010-11, but this was hit by a number of shocks in various regions, from a fall in commodity prices to shaky growth of the Chinese economy. In 2014, the dollar started to strengthen, and at the end of 2015, the United States Federal Reserve implemented an interest rate hike, a first in close to a decade. 

In 2016, the global growth rate was 3.3 percent, the lowest rate since 2009, and in the same year the UK’s Brexit decision surprised the entire world. Later in the year, manufacturing picked up, something that contributed to an uptick in global trade. In April 2018, the World Economic Outlook (WEO) projected the global economy to grow at 3.9 percent for 2018 and 2019; an assessment later downgraded to 3.7 percent as a result of the reassessment of growth projections in emerging markets and some of the major economies.

While 2018 was considered a strong year, many financial and economic experts are looking forward to 2019 and what it holds. This information is not only of interest to policymakers but also to entrepreneurs and business executives who understand the effect of the global economy on investment and banking trends. Willah Joseph Mudolo, a co-founder of the ADF Group, is among many business executives with extensive experience who look forward to a strong year.

Growth Prospects

According to some, global growth will likely remain at 3.7 percent, with the top two economies likely to post some good expansion rates. The US, in particular, had a strong couple of quarters in 2018, and while the numbers may show a slower pace towards the end of the year, expansion is likely to be recorded at close to 3 percent. In 2019, growth in the US is expected to slow down, with 2018’s surge as a result of tax cuts implemented by President Donald Trump, which are subject to debate on their impact in the short and long term. Analysts will also keep a close eye on whether the Federal Reserve raises interest rates as a way of managing inflation.

The other big economy, China, may continue with the economic slowdown it has experienced for a while, but 2018 numbers suggest growth of more than 6 percent. At those rates, the country’s economy may witness some improvements in the living standards.

Trade Conflicts

Economic analysts expect trade wars to continue in 2019, with the US and China already at the centre of a trade confrontation. Such a scenario is likely to introduce uncertainty for businesses and policymakers, with the former looking to mitigate the impact of trade tensions on supply chains, while the latter will try to assess the impact of tariffs on inflation and growth.

While both presidents of China and the US have held talks, the hope is that any serious ramifications will be averted. However, the US tariffs on aluminium and steel, implemented on national security grounds, have cast a dark cloud on the state of trade partnerships with some of the United States’ partners.

Wages and Workers

Even as job creation is expected to slow down, labour markets for the top economies are expected to tighten, leading to higher wages that may work against businesses seeking to plug talent gaps. Germany and the US are expected to have reduced unemployment rates, while other economies may not reduce unemployment any further than they already have (e.g. Canada, Denmark, Belgium, and the Netherlands). The UK is not forgotten either, with 2019 expected to be the year of the actual Brexit, which could have an impact on unemployment numbers.