Global Outlook – Macro downgrades and global easing

We have downgraded our global economic growth forecasts… and expect a global monetary easing cycle to take shape by the end of this year. This implies a longer period of sub-trend economic growth rather than recession for the global economy. Economic growth could be roughly 0.5 pp lower on average in the major economies over the next twelve months compared to our current base scenario. Within the eurozone we expect to see quarterly growth close to stagnation for the rest of this year, with technical recessions in Italy and Germany. In the US overall economic growth will be sub-trend for the next three quarters before recovering back to trend in Q2 2020. We expect central banks to embark on an easing cycle over the coming months, with the Fed cutting rates and the ECB launching QE.