Global Economic Expansion Has Become Less Even

While the global economy is expanding, this growth has become less even across economies. The global economy will grow by 3.8 percent over the next two years, mostly powered by an American fiscal stimulus. Uncertain political futures hamper growth rates in the United Kingdom with Brexit looming , Brazil with volatile presidential elections, and the euro area, with a combination of Brexit and increasing Italian debt.

This period of expansion in the US economy could prove to be one of the longest on record. However, this outlook could be overly optimistic if a trade war spills into financial markets, inflation rises faster than expected, or US asset prices drop, like stocks or housing.

This PIIE Chart was adapted from Karen Dynan’s presentation at the October 4, 2018 event, Global Economic Prospects: Fall 2018.