April 2019 update to TIGER: World economy lurches from uneven recovery to synchronized slowdown

In collaboration with the Financial Times (FT), Eswar Prasad of Brookings and Ethan Wu of Cornell have constructed a set of composite indexes which track the global economic recovery. The Tracking Indexes for the Global Economic Recovery (TIGER) is also featured in the Financial Times. A version of the commentary will appear in Project Syndicate.

 
The drumbeat of warnings about a looming worldwide recession is rising. Although such concerns seem premature, the latest update of the Brookings-Financial Times TIGER index indicates that major advanced and emerging market economies are all losing growth momentum. The nature of the slowdown has ominous portents for these economies over the next few years, especially given present constraints on macroeconomic policies that could stimulate growth.

Weakening business and consumer sentiment, along with geopolitical uncertainties and trade tensions, have dampened business investment and could hurt future growth prospects. High levels of public debt are likely to limit the ability of major advanced economies to counteract a slowdown with fiscal stimulus. Conventional monetary policy remains constrained in many advanced economies where policy rates are close to or below zero, while any further unconventional monetary policy actions present significant risks and uncertain payoffs.

The U.S. expansion has moderated as fiscal stimulus wears off and growth in indicators such as employment and retail sales weakens. Waning business and consumer confidence, along with a yield curve that remains relatively flat despite prospects of large U.S. budget deficits, suggest further weakness ahead. Muted wage and inflationary pressures have led the Federal Reserve to pull back from its rate tightening plans, with the debate shifting toward possible rate cuts and a halt to the unwinding of the Fed’s balance sheet.

Click a country name below the Composite Index to view charts for the main TIGER indexes by country and charts for the indicators that make up the indexes, which are broken down by real activity, financial, and confidence indicators for advanced economies and emerging markets.

Πηγή: brookings.edu