Which are the economic forecastings for 2020?

Rafael Doménech analyzes the factors that mark the finances of this new year.

 

Go to Perspectives 2020

Passwords macroeconomic outstanding

For Rafael Doménech.

  • The world economy finish your deceleration in 2020 and the monetary policy remain stable.
  • The economy Spanish has stabilized in the growth of 1.6% and is better prepared for the smaller growth world.
  • The risks key for this year are the commercial tensions between China and The United States, the Brexit, the elections North American and the tensions geopolitical, with the consequences on the oil. Owe be attentive to the evolution of the protectionism, the main risk at this time.
  • In Spain the risks center on the growth world, especially the European and the tensions geopolitical. The new government owes take measures directed to improve the investment productive and the productivity and to reduce the uncertainties. In 2020 the growth from Spain be in 1.6%, the inflation in 1.1% and the unemployment reduce until the environment of 13.5%. 
  • The world economy finish your deceleration in 2020 and the monetary policy remain stable.
  • The economy Spanish has stabilized in the growth of 1.6% and is better prepared for the smaller growth world.
  • The risks key for this year are the commercial tensions between China and The United States, the Brexit, the elections North American and the tensions geopolitical, with the consequences on the oil. Owe be attentive to the evolution of the protectionism, the main risk at this time.
  • In Spain the risks center on the growth world, especially the European and the tensions geopolitical. The new government owes take measures directed to improve the investment productive and the productivity and to reduce the uncertainties. In 2020 the growth from Spain be in 1.6%, the inflation in 1.1% and the unemployment reduce until the environment of 13.5%. 

In this 2020, be 4 the factors that mark the economic forecastings so much to level world as in our country:

  1. The growth, to level world, stabilizes on a par that decrease the commercial tensions and the volatility financial after to the agreement between USA and China, good perspectives for the USCMA and the reduction of the risks for a Brexit hard (and of recession in The United States and Europe).
  2. With a growth expected of 1.8% in The United States and of 0.9% in the UEM (in 2020), not expect change in policies monetary of the FED and of the ECB this year, but yes decreases of the interest rates in countries emerging. Moreover, is necessary to be attentive to the evolution of the geopolitical tensions in Middle East, above all between The United States and Iran, which influence in the oil price.
  3. Waiting that the growth of GDP in Spain is of 1.6% in 2020, in line with what was happened in the most part of the 2019. All, in spite of the uncertainty and your detrimental impact in the lawsuit intern which, that yes, seems limited. On the other hand, the exports be showing a tipping point and a certain recovery whereas the trade policy continue being procyclic.
  4. Is as is, the economy Spanish is better prepared for face an environment of smaller growth world. Not perceive imbalances important, the financial situation of the sector private is solider and the ECB guarantees low costs of financing. However, these patterns owe follow reinforcing, adding effort additional for reduce the unemployment (with new refurbishment) and avoid more uncertainties (which reduces the investment).

The situation of the global economy

On the basis of our indicator, the deceleración have detainee and the growth be stabilizing around 3%. The trade world, on the other hand, also stabilizes waiting for that the smaller tensions agents drive again the growth of the exports. These, in last quarters, have generated a strong deceleration of the exports world, very correlated with the leading indicators of activity of the OECD. The latest data show a stabilization of these exports, that owe show an increased dynamism in 2020 as a result of recent agreements between EE.UU. and China, and in the case of the eurozone, for the smaller uncertainties on the Brexit and the recovery from Turkey.

In this context of growth, and already in 2020, the Central Banks keep without changes the expansive tone of your monetary policy . As for the FED, and after the reduction of 75 basis points in 2019, not expect changes in the interest rates in this year that start. Neither expect changes, in the ECB, in the interest rates of the deposits (currently in - 0.5%) nor increases in the purchases of assets (what call Expansión Quantitative). 

However, Cristine Lagarde has advertised that be this year 2020 in which carry out a checkup exhaustive of the strategy of monetary policy, in which revise the definition of the inflation target , assess your different tools for the monetary policy and consider the creation of a digital cash for the eurozone.

In short, the predictions economic foresee a stabilization in the growth world close to 3%, detailed thus:

In The United States

The growth converges to your potential in 2020 while decreases the risk of recession of last quarters. 

The reasons are:

  • The consumer spending continues strong, supporting the economic activity while persists the weakness of the private investment.
  • The growth of the GDP converges to your potential, without inflationary pressures significant.
  • In spite of reduce the risk, the smaller growth world, the uncertainty that still existing on future negotiations with China and the mentioned one ‘inversión débil’ worry in this kick-start of 2020.
  • The same thing happens with the politicaltension, that be able to increase before the elections of 2020.

In China

Continues the soft landing while the desaceleración is smaller of what was foreseen. The effects of the commercial tensions of 2019 sum to a deceleration structural already acquaintance of previous years, but with a better growth of what was expected. This, for 2020, has revised slightly with an upward trend for the commercial lessen tension and for the great predisposition to the use of fiscal stimuli and monetary.

Which are the risks? Rivalry strategic with EE.UU, in spite of the recent trade agreement.

  • The measures of monetary incentive and district attorney be able to generate a great indebtedness of the economy Chinese.

Eurozone

Your growth stabilizes and improve slightly the expectations, revising the growth of the GDP with an upward trend (in a tenth) with details better of the expected ones, reinforcing the perspectives of stabilization while the inflation follows under the objective of the ECB. In monetary policy, on the other hand, waiting that the interest rates remain in the current levels , at least until 2022. Last of all, the fiscal policy be still expansive in 2020, with a Brexit tidy in January and knowing that the agreement among United Kingdom at the end of 2020 is still a risk important.

Key factors for the perspectives economic to level world

  1. Negotiations of trade policy between EE.UU. and China.
  2. Elecciones presidential in EE.UU.
  3. Negotiation relating to the Brexit.
  4. Changes in the monetary policies of the FED and the ECB.
  5. Debate on the fiscal stimulus in Europe.
  6. Tensions geopolitical and the tension for the oil price .

Risks that can affect this growth

Although the overall risks have declined short term by the trade agreement between EE.UU. and China, have increased in Middle East as a result of the conflict between The United States and Iran. This us takes to have to be attentive to the evolution of the oil price, while the vulnerabilities financial can amplifly the effects of these risks. 

For China

The main risk is still the protectionism. Additionally results dangerous the possible deleverage untidy as a result of the expansive policies, both fiscal and monetary. Moreover, continue the tensions geopolitical in Hong Kong. 

For the eurozone

Is necessary to see how recover the exports and how evolve the politicaluncertainties.

Growth in Spain

Taking into account this context international, the economic forecastings mark that the economy Spanish can grow up to 1.6% in 2020. The deceleration of the growth that have seen in last quarters be touching fund, unless materialize some risks existing. Actually, have seen that the GDP is stabilizing, serving as shows the 3 last quarters of 2019 in which have finished with 0.4% of growth. The same one that waiting in the first quarter of 2020. 

The atony of the labor market also be touching fund. Discounted the variations for causes seasonal, the membership to the Social Security Institute be able to have increased 0.4% in the 4th term of the 2019.

With all, this growth mentioned previously depend on the evolution of the different uncertaintyfocuses:

  • The recovery of the international trade and of the growth in the eurozone, with the effect drags that can have on the exports Spanish.
  • The economic policies of the new government. Your measures owe favor the investment, reduce the uncertainties and keep restrained the risk premiums. For this, is necessary to achieve measures consensual (for example, decisions on MINIMUM WAGE or the labor reform).
  • Take up again the tax adjustment with measures that not damage the investment, the innovation and the employment.
  • The political lessen tension in Catalonia and your effects on the economic activity.

Refurbishment for increase the growth in the medium term

  • Favor the investment productive: Over last years have been able to see that the investment in machinery and team in Spain has showed an increased dynamism in front of what observes in the major European economies. Thus, from 2017, this type of investment has incremented 16.1%, in front of 9.6% in the UEM, in an environment of high uncertainty. Watching towards moves forward, waiting that the environment of low types, high liquidity and responsibility in the market banking continue driving this financing and investment.
  • Favor the growth of the working population and of the unemployment: In last quarters have seen that the working population grows again, boosted by the advance of the coming from immigration, above all, from Central America, Europe and Asia. This, increases the growing capacity long-term and, also, explains the moderation recent in the decrease of the unemployment rate. Thus, and so that this follows going down, are necessary policies appropriate for improve the efficiency and equity of the labor market.
  • Increase the potential growth of the GDP with more employment growth and a productivity tips of the economy Spanish: The estimates point out to a potential growth between the 1.5 and 2%, without inflationary pressures although sees a certain growth of the wages.
Until 10,000€ for bring your fund
Goes through to BBVA a fund of another company and obtain up to 1.5% of the amount gone through.
Until 10,000€ for bring your fund Find out more