Economic growth

Will Escalating Trade Tensions Lead to a Global Economic Downturn?

Posted Friday, July 26, 2019 by
Arslan Butt • 1 min read

According to a Reuters poll, global economic growth could slow down even further as leading central banks turn more dovish by resorting to rate cuts or easing of monetary policies. Global trade tensions, especially the US-China trade war, has caused economic growth to slow in leading economies worldwide.

On the plus side, however, weak economic data has caused global stock markets to rally lately, even though uncertainty around trade runs high in financial markets. According to the poll, growth outlook for almost 90% of 45 economies was downgraded or left unchanged, not just for 2019 but also for 2020.

What’s even more worrying is that more than 70% of the 250 economist polled expect a deeper economic downturn globally now than during the previous poll. The ECB has stated its intentions to introduce policy easing measures and rate cuts as soon as September, while the Fed is also widely expected to cut interest rates at its next week’s meeting.

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