Uncertainty and Other Factors are Dragging Down the Global Economy
Economic expansion is slowing because of a confluence of headwinds, including fading fiscal stimulus in the United States and uncertainty over trade wars and other potential disruptions. In the United States, growth has moderated and is expected to fall to its trend pace next year. US growth has been driven by consumer spending, with business investment having stalled amid ongoing uncertainty about trade policy and the global outlook. Brexit issues are a drag on the UK economy, and the German manufacturing sector has been hit hard, but the euro area as a whole is projected to continue to grow around its trend pace. China continues to see an ongoing structural slowdown.
This PIIE Chart was adapted from Karen Dynan's presentation at the October 8, 2019 event, Global Economic Prospects: Fall 2019.