World Economic Outlook, April 2019: Growth Slowdown, Precarious Recovery
World Economic Outlook, April 2019
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Bibliographic details
- Published: April 2, 2019
Global growth projections and headline prospects
- Global growth is projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020.
- After peaking at close to 4 percent in 2017, global growth remained strong, at 3.8 percent in the first half of 2018, but dropped to 3.2 percent in the second half of the year.
- Following a broad-based upswing in cyclical growth that lasted nearly two years, the global economic expansion decelerated in the second half of 2018.
Drivers of the 2018 slowdown and near-term risks
- Trade tensions and tariff hikes between the United States and China contributed to an increase in policy uncertainty and a decline in business confidence.
- A tightening of financial conditions and worsened financial market sentiment weighed on global demand, affecting vulnerable emerging markets in the spring of 2018 and advanced economies later in the year.
- Country- and sector-specific factors further reduced momentum:
- China’s growth declined following regulatory tightening to rein in shadow banking and an increase in trade tensions with the United States.
- The euro area lost more momentum as consumer and business confidence weakened; car production in Germany was disrupted by the introduction of new emission standards.
- Investment dropped in Italy as sovereign spreads widened.
- External demand, especially from emerging Asia, softened.
- Natural disasters hurt activity in Japan.
- Conditions have eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US–China trade deal, but conditions remain slightly more restrictive than in the fall.
Analytical chapters and thematic focus
- Chapter 2: The Rise of Corporate Market Power and Its Macroeconomic Effects
- Chapter 3: The Price of Capital Goods: A Driver of Investment Under Threat?
- Chapter 4: Drivers of Bilateral Trade and Spillovers from Tariffs
Key findings from Chapter 2: The Rise of Corporate Market Power and Its Macroeconomic Effects
- Three main takeaways from cross-country firm-level analysis:
- Market power has increased moderately across advanced economies, as indicated by firms’ price markups over marginal costs rising by close to 8 percent since 2000, but not in emerging market economies.
- The increase has been fairly widespread across advanced economies and industries, but within them, it has been concentrated among a small fraction of dynamic—more productive and innovative—firms.
- Although the overall macroeconomic implications have been modest so far, further increases in the market power of these already-powerful firms could:
- Weaken investment.
- Deter innovation.
- Reduce labor income shares.
- Make it more difficult for monetary policy to stabilize output.
World Economic Outlook, April 2019: Growth Slowdown, Precarious Recovery — IMF
Content in this bundle
- Chapter 1
- Chapter 1 Annex
- Chapter 2
- Chapter 2 Annex
- Chapter 3
- Chapter 3 Annex
- Chapter 4
- Chapter 4 Annex
- Dataset overview: WEO Chapter 1 Apr. 2019
- WEO Chapter 2 Apr. 2019
- WEO Chapter 3 Apr. 2019
- WEO Chapter 4 Apr. 2019
- Executive Summary
- Foreword
- World Economic Outlook, Growth Slowdown, Precarious Recovery, Statistical Appendix, April 2019, IMF
- Table a
- Table b
- Full Report
