The global economic growth outlook reveals diverse trends across major economic blocs, with the United States showing exceptional resilience compared to the Eurozone and China. According to Martin Van Vliet, Global Macro Strategist at Robeco, the current scenario raises questions about how long this balance can persist.
United States: robust consumption amid uncertainties
US growth is driven by strong consumer spending, particularly among high-income households, supported by rising net wealth. However, lower-income families have adopted a more cautious approach, highlighting growing economic disparities. This trend extends to businesses, where smaller private companies face greater challenges compared to large corporations.
Looking ahead, expansive fiscal plans from the new administration could sustain growth momentum. However, policies on immigration and tariffs pose potential risks, with trade policy uncertainty already dampening growth prospects in 2019.
China: signs of recovery amid ongoing challenges
China’s growth shows mixed signals. While housing sales are rebounding, consumer sentiment remains cautious. Additional economic stimulus will be essential to ensure sustained growth.
Eurozone: structural challenges and opportunities
The Eurozone continues to experience modest growth, with Germany and France struggling, partially offset by smaller economies like Spain and Greece. Consumer spending could exceed expectations if household savings rates decline and labor markets remain stable. However, political and trade tensions remain significant hurdles to faster growth.
Inflation: a shared challenge
The inflation outlook varies significantly across economies. In the US, core inflation has slowed, but the final stretch toward the central bank’s target remains challenging. Reflationary fiscal policies and potential new tariffs could increase inflationary pressures in the short term.
In the Eurozone, slowing wage growth suggests lower inflation risks. However, the imposition of tariffs could lead to a deflationary dynamic. In emerging markets, disinflation has stalled in some regions, while pressures remain contained in Japan and China.
A forward-looking perspective
Van Vliet anticipates that the growth gap between the US, Eurozone, and China will narrow by 2025. However, risks tied to inflation, trade, and fiscal policies demand careful attention and adaptability.
