Wednesday, January 22, 2020 / 06:00 AM / By Proshare Research / Header Image Credit: EcoGraphics

Global Macroeconomic
Review and Outlook
There has been a significant
downtrend in global growth. Major economies such as the United States of
America (USA), China, Japan, Germany etc. have been negatively affected. Emerging markets and developing economies
such as Brazil, India, China, Mexico and Russia have been a part of this
crisis.
The slowdown in global
economic growth is attributable to the following:
- A trade
dispute between the USA and China resulting in a cut in the size of both
bilateral and international trade accompanied by weakening investor confidence.
- A
slowdown in demand in China, driven by regulatory efforts to rein in debt but
made worse by the macroeconomic consequences of increased global trade
tensions.
- A huge
slump in the automobile industry, which has negatively affected car production
in the USA and Europe.
- A
slowdown in Chinese imports and export growth.
- Investment
hold-back fired by Brexit-related uncertainty.
Advanced Economies
- Most advanced economies have adopted expansionary monetary policy to
increase economic growth. The USA Federal Reserve cut the Federal Funds rate in
July and September 2019, the European Central bank reduced its deposit rate and
announced a resumption of quantitative easing.
A fall in foreign direct investment (FDI) in most advanced economies
have led to a decrease in their financial flows.
Emerging and Developing Economies
- Taking a cue from the advanced economies, central banks in some emerging
markets and developing economies have cut policy rates to boost productivity
and growth i.e. Mexico, Philippines and Brazil cut their interest rate to
7.25%, 4.0% and 5.5% respectively. Emerging market economies have witnessed
varying degrees of capital flows attributable to differences in economic and
political fundamentals of the various countries.
Growth Forecast for Advanced Economies
IMF projects a growth
rate of +1.7% for
advanced economies in 2019 and 2020. But beyond 2020, the Bank projects growth
in these economies to stabilize at about +1.6%.
- The U.S
economy witnessed a growth in its employment and consumption in the first half
of 2019 despite slow growth in total investment. The IMF projects that the
growth rate in the U.S will be +2.4% in 2019 and will moderate to +2.1% in 2o20. Its projections are based on an
assumed shift in the fiscal stance from expansionary in 2019 to broadly neutral
in 2020.
- In the
Euro area, a fall in foreign demand and a reduction in inventories attributable
to weak industrial production has dampened the growth prospects of the region.
IMF projects growth to be +1.2% in 2019 and +1.4% in 2020 as activities are expected to pick up modestly in 2020, external
demand is projected to gain some momentum, and temporary factors (including new
emission standards that hit German car production) continues to fade. France,
Germany, Spain and Italy are projected to experience a further decline in their
growth level as a result of weaker external demand, smaller fiscal impulse and
reduction in private consumption.
- According
to the IMF, growth in the U.K is projected to expand to +1.2% in 2019
and +1.4% in
2020. The U.K economy has been negatively affected by the slowdown in growth
rate and the ongoing Brexit uncertainty. The reality of Britain leaving the E.U
with a deal or without a deal is still unknown.
- Japan
has been able to cushion the negative effect of the global slowdown in growth and
trade tensions with an increase in private consumption and public spending. The
IMF projects the Japanese economy to grow by +0.9% in 2019 and +0.5% in
2020.
Real GDP Growth Rate (%) 2017-2020


Emerging Market and Developing Economies
Emerging and Developing
Asia
- It remains the fastest-growing
region in the world; therefore, it is the main growth engine of the world
economy.
- The Chinese economy has
witnessed structural slowdown caused by increases in tariffs and weakening
external demand
- The Chinese reformed their
interest rate policy, targeted towards greater effectiveness in monetary
policy and low finance costs to the real economy.
- The IMF
projects a growth rate of +6.1% in 2019 and +5.8% in 2020.
- The Indian
economy is projected to grow at +6.1% in 2019,
picking up to +7.0% in 2020.
- Growth is
expected to be supported by the lagged effects of monetary policy easing,
a reduction in corporate income tax rates etc.
Latin America
- In Latin America, there has
been a slowdown in economic activities in most of their economies.
- Brazil witnessed disruption in
their mining supply while the Mexican economy was negatively affected by
the slowdown in global growth, trade war and trade tensions, which had
adverse effects on private consumption, business confidence, borrowing
cost and investment.
- The Venezuelan economy is
troubled by humanitarian and economic crises. IMF projects growth in the
region to be +0.2% in 2019 and +1.8% in 2020.
The Middle East and
Central Asia
- It is expected to grow at +0.9% in 2019 and +2.9% in 2020 according to IMF
forecast.
- The non-oil sector of the
region is expected to strengthen further in 2019 and 2020. Oil GDP in
Saudi Arabia is projected to decline against the backdrop of the extension
of the OPEC agreement and a generally weak global oil market.
- Growth is projected to pick up
in 2020 as oil GDP stabilizes, and solid momentum in the non-oil sector
continues. Civil strife in some other economies, including Libya, Syria
and Yemen, weigh on the region's outlook.
Sub-Saharan Africa
- It is projected to grow at +3.2% in 2019 and +3.6% in 2020, according to IMF
forecast.
- Volatility in the oil prices
earlier in the year have supported the subdued outlook for Nigeria and
some other oil-exporting countries in the region, but Angola's
economy-because of a decline in oil production is expected to contract
this year and recover only mildly next year.
- Labour strikes, energy supply
issues in mining and weak agricultural production have negatively affected
the South African economy. Nigeria, South Africa and Angola are projected
to continue with their poor performance, other economies such as the
Ethiopian economy, which is more diversified, is experiencing faster
growth.
- About 20 economies in the region,
accounting for about 45% of the Sub-Saharan African population and 34% of
the region's GDP (1% of global GDP), are estimated to be growing faster
than +5% this year.
Emerging And Developing
Europe
- The slow growth in emerging and
developing Europe in 2019 reflects a slowdown in Russia and flat activity
in Turkey.
- According to the IMF, the
region is expected to grow at +1.8% in 2019 and +2.5% in 2020. In Russia, growth has
been weaker this year, but it is projected to recover next year,
contributing to the upward projection for the region for next year.
- Resilient domestic demand,
rising wages have led to solid growth experienced by several countries in
Central and Eastern Europe, including Hungary and Turkey.
Real GDP Growth Rate (%) 2017-2020

Do feel free to share your opinions/observations
and feedback with us vide content@proshareng.com and/or research@proshareng.com

Related News From
Proshare 2019 Review and 2020 Outlook Report
- Proshare 2019
Review and 2020 Outlook Report (1) - Financial
Markets in Transition; Understanding Past Uncertainties, Preparing for New
Possibilities

Related News From Proshare 2018
Review and 2019 Outlook Report
- Proshare
NCM 2018 Review and 2019 Outlook (26) - The Capital Market: Facing
Uncertainty and Grabbing Opportunities
- Proshare
NCM 2018 Review and 2019 Outlook (25) - Nigeria:
Crouching Tiger, Hidden Lion
- Proshare NCM 2018 Review and
2019 Outlook (24) - Sectoral
Market Capitalizations - Oil and Gas Sector Recorded 7.24% Growth in 2018
- Proshare NCM 2018 Review and
2019 Outlook (23) - Agriculture
Sector - OKOMUOIL Tops on EPS as PRESCO Tops on PE Ratio
- Proshare NCM 2018 Review and
2019 Outlook (22) -Healthcare
Sector- MORISON Tops on EPS, PAT Margin and ROE
- Proshare NCM 2018 Review and
2019 Outlook (21) - Industrial
Goods - DANGCEM Tops on EPS, PAT Margin as BERGER Tops on PE Ratio
- Proshare NCM 2018 Review and
2019 Outlook (20) - Oil and
Gas Sector - SEPLAT Tops on EPS and PAT Margin
- Proshare NCM 2018 Review and
2019 Outlook (19)- Consumer
Goods Sector - NESTLE Tops on EPS as ENAMELWA Tops on PE Ratio
- Proshare NCM 2018 Review and
2019 Outlook (18) - Financial Services Sector - STANBIC Tops on ROE as NESF Tops on EPS
- Proshare NCM 2018 Review and
2019 Outlook (17) - Eight Financial Services Stocks
Dominate the List of 28 Stocks You Should Not Touch
- Proshare NCM 2018 Review and
2019 Outlook (16) - Stocks Off and Near 52-Week
Highs and Lows
- Proshare NCM 2018 Review and
2019 Outlook (15) - Extracts of Financials of Quoted
companies - DANGCEM Tops on Revenue, PAT and Net Assets
- Proshare NCM 2018 Review and
2019 Outlook (14) - Growth of Securities Listed on
NSE - Total Securities Listed Increased By 9.58%
- Proshare NCM 2018 Review and
2019 Outlook (13) - Forty-Six Financial Services
Stocks Are Penny Stocks in 2018
- Proshare NCM 2018 Review and
2019 Outlook (12) - Foreign Portfolio Participation
in Equity Trading in 2018
- Proshare NCM 2018 Review and
2019 Outlook (11) - Market Records 32 Gainers to 109
Losers in 2018; CCNN Tops Gainers List
- Proshare NCM 2018 Review and
2019 Outlook (10) - NSE ASI Performance Review and
How Each Company Fared in 2018
- Proshare NCM 2018 Review and
2019 Outlook (9) - New Listings and De-Listings in
2018: Market Records One New Listing and Four De-listings
- Proshare NCM 2018 Review and
2019 Outlook (8) - Trading Statistics in 2018 - Total Market Volume Increased By 5.92%
- Proshare NCM 2018 Review and
2019 Outlook (7) - Bond Market: Safety In A Season
Of Uncertainty
- Proshare NCM 2018 Review and
2019 Outlook (6) - Mutual Funds -A Tale of Mixed
Fortunes
- Proshare NCM 2018 Review and
2019 Outlook (5) - Market Records 8.53% Growth in
Q1'18; Negative Sentiment Permeates in Subsequent Quarters
- Proshare NCM 2018 Review and
2019 Outlook (4) - Economic Indicators: Moving
Forward Slowly
- Proshare NCM 2018 Review and
2019 Outlook (3) - African Markets Still Depressed
- Proshare NCM 2018 Review and
2019 Outlook (2)- Global
Market in Tumbles
- Proshare NCM 2018 Review and
2019 Outlook (1)- Surviving
Uncertain Times in the Nigerian Financial Market

Related News From Proshare 2017 Year
End Review
1.
Financial Services
Sector is the Most Capitalized Sector; Contributes 31.62% to Total Market CAP
2.
Extract
from Financials - DANGCEM Tops Companies by Turnover, PAT, Fixed Asset as well
as Net Asset
3.
Global
ETFs in 2017
4.
Stocks
Trading at Their Nominal Value as at 29122017
5.
DANGSUGAR,
INTBREW Top Gainers as MORISON, JAIZBANK Top Losers in 2017
6.
New Listings
and Delistings in 2017
7.
Trading
Statistics in 2017 - TRANSCORP, UBA Top Market Volume
8.
Argentina,
Nigeria Lead as Best Performing Stock Markets in the World in 2017
9.
Stock
You Should Not Touch - 63 Stocks Record No Price Movement in 2017
10. Stocks
Off and Near 52-Week Highs and Lows as at 221217
11.
Top 10
Policy Reforms in 2017
12. Zimbabwe,
Malawi Stock Markets Lead African Markets in 2017 as Ivorian BRVM-10 Top Losers
13. Nigeria's
Top Ten News Makers in 2017
14. Nigeria’s
Economic Indicators in 2017
15. Market
Movements in 2017 - Forex Reserves Up by 44.54%
16. Foreign
Portfolio Participation in Equity Trading in 2017
17. Oil
and Gas Sector - SEPLAT, ETERNA Top Gainers as FO Records -47.19% YTD Return
18. Consumer
Goods Sector - GUINNESS Records Over 3,000 PE Ratio
19. Financial
Services Sector - GUARANTY Records 40.52% PAT Margin as NESF Tops on EPS
20. NSE
ASI Performance Review and How Key Sectors Fared in 2017
21. 47
Financial Services Sector Stocks Are Penny Stocks in 2017
22. Movers
and Shakers in 2017 - DANGCEM, GUARANTY Record Growth in MKT CAP as FO, MOBIL
Lead Otherwise

Related News From
Proshare 2016
Year End Review
1.
Trading Statistics in
2016 - UBA, WEMANK Top Market Total Volume in 2016
2.
82 Quoted Companies
Declared Dividends and Bonuses in 2016
3.
38 out of 47 Stocks
Listed Between 2008 and 2016 Trade Below Their Listing Prices
4.
7 Stocks With PE Ratio
Within Average Market Acceptable Ratio
5.
Consumer Goods Sector - NESTLE, CHAMPION and NB Record Over 1,000 PE Ratio
6.
Healthcare Sector
Records No Gainer as EKOCORP Tops on EPS and PE Ratio
7.
Financial Services
Sector - NESF Records 47.42 EPS Ratio as Banking Stocks Dominate Gainers List.
8.
45 Resignations
Announced by Quoted Companies in 2016
9.
104 Appointments Made
by Quoted Companies in 2016
10. Foreign Portfolio
Participation in Equity Trading Drops in 2016
11.
Stocks from the
Financial Services Sector Dominate the List of Penny Stocks in 2016
12. NSE ASI Performance
Review and How Key Sectors Fared in 2016
13. Movers and Shakers in
2016 -GUARANTY, SEPLAT Record Growth in Market CAP as FO, WAPCO Lead Otherwise
14. Global Market:
Argentina, Italy lead as Best Performing Stock Markets in the World

Related News From
Proshare 2015
Year End Review
1. Trading Statistics by Sector in 2015: Financial
Services Tops with over 80% Contribution by Volume
2. Trading Statistics in 2015: Total Market Volume Drops
by -5.10%
3. Movers and Shakers in 2015: WAPCO, FO Record Growth
in Market Capitalization
4. Nigerian Stock Market Records -22.47% YTD loss as
EVANSMED Tops Losers with -78.07%
5. Nigeria's
top newsmakers of the year 2015
6. How key Sectors fared in 2015
7. The NBS Consumer Price Index - January to November
2015
8. Where to invest in 2016 as economic uncertainties
continue to grow
9. Top 10 Policy Reforms in 2015
10. Nigerian Economic
Indicators in 2015

Related News - Reviews and Outlooks
1.
FY
2020 Outlook: Treading Uncharted Waters - CardinalStone Research - Jan 21, 2020
2. NSR H1 2020 (10) -
Monetary Policy - CBN Caressing Both FPIs and Economic Growth - ARM - Jan 20, 2020
3. NOVA Economic Outlook
H1 2020 - Nigerian Economy To Grow By 2.4% YoY Over 2020 - NOVA Mercahant Bank - Jan 17, 2020
4.
Year
Ahead 2020 - Re-risking The Financial System - Coronation Research - Jan 16, 2020
5.
Meristem
Research 2020 Outlook - Finding Alpha Amidst The Haze - Mersitem Research - Jan 08, 2020
6.
Nigeria
in 2020: Awakening the Sleeping Giant - WSTC - Jan
07, 2020
7.
Nigeria
Economic Outlook 2020: A Different Playing Field - United Capital Research - Jan 02, 2020
8.
Nigeria
FY 2020 Outlook - A Delicate Sprout - Vetiva
Research - Dec 17, 2019
9.
2020
Outlook: At the Cliff's Edge - Macroeconomic Review and Outlook - Cordros - Dec 10, 2019

