It’s all down to the FAANGS
February 18, 2019
The world economy continues to show significant signs of a slowdown. Back in April 2018, I reckoned that the mini-boom of 2016-17 had peaked and the world economy would now descend into another Kitchin cycle downswing. Moreover, this showed that nearly ten years from the end of the Great Recession in mid-2009, the world economy was still stuck in a Long Depression, or ‘secular stagnation’ (in Keynesian language).
Last month, data showed that the German economy, the powerhouse of Europe, had only narrowly avoided a ‘technical recession’ in the second half of 2018. This was partly caused by the global slowdown in the auto sector due a sharp drop in demand along with restrictions on diesel car emissions. Now in February, the EU Commission slashed its real GDP growth forecasts. The Commission cut its Eurozone growth forecast for this year to 1.3% from 1.9% in its earlier forecast last autumn, citing “large uncertainty” from Brexit negotiations, slowing growth in China and weakening global trade. At the same time, the Bank of England cut its forecast for the country’s economic outlook in the wake of greater uncertainty over Brexit and a slowdown in global growth. The downgrade for 2019 growth expectations to 1.2% is the weakest level in a decade. The Eurozone growth rate for the last quarter of 2018 is already there.(...) ver link