The global economic growth is set to slow down from the initial 3.2 percent to 2.9 percent according to the latest stats from the World Bank.
The World Bank had projected that the global economy would grow at 3.2 percent in 2019 but had to downgrade it by 0.3 percent to 2.9 percent.
The slowing global economic growth has been attributed to the increased policy uncertainty, recent re-escalation of trade wars between the United States and China as well as the increased geopolitical tensions between the United States and Iran.
Most investors around the world have adopted the wait-and-see approach as they monitor the unfolding events between the US and Iran, and the US and China.
The International Monetary Fund (IMF) downgraded its 2019 growth projections by 0.2 percentage points to 3.3 percent from the estimated growth of 3.5 percent.
There is likely to be an overall slow in global trade, which, according to World Bank, is expected to record a 2.6 percent growth in 2019, a 1.0 percent points downward revision from the 3.6 percent growth expected as at January 2019.
The US Federal Open Market Committee (FOMC), met 4 times in H1’2019, and maintained the Federal Funds Rate at the current range of 2.25 – 2.50 percent.
The FOMC indicated that it would adopt a “patient” stance even in the face of a relatively slower economic growth, hinting at a possible rate cut should macroeconomic conditions worsen, a shift from earlier expectations of at least two hikes in 2019.
There are fears that the United States of America might go to war with Iran in a move that is likely to change the economic set-up around the world.
Iran is a major producer of oil and there are fears that the Arab nation might revolt against the US-leaning nations in a war that will not affect the US alone.
The tension between the United States of America and China has been going on for a while. As a reprieve, President Donald Trump suggested that he would allow American techs to trade with the Chinese techs such as Huawei.