We see world GDP growth slowing further as the US succumbs to the weakness which is already evident elsewhere. The downturn in global manufacturing is spreading to the services sector and labour markets are also starting to suffer. What’s more, we now envisage a further escalation of the trade war, which would add to the headwinds for the world economy. Central banks seem set to respond, but this is unlikely to prompt a recovery until well into next year. Even then, improvements in advanced economies will be tempered by softness in emerging markets, several of which are undergoing structural as well as cyclical downturns.
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