Global Output Growth Cycle Has Peaked, But Global GDP Growth to Continue

Key points

• Recent data indicates that the global output growth cycle has peaked. We expect global GDP growth to continue, but at a slightly slower pace than in the past two years.
• Tariff increases and trade disputes have contributed to slowing growth and have added uncertainty to the global economic outlook.
• While slightly faster wage growth in advanced economies and tighter labour markets raise the potential for higher inflation, the fall in oil prices in late 2018 should, with slowing output growth, prevent a widespread pick-up in inflation.
• Continued low inflation opens the possibility for central banks to increase monetary accommodation to support economic activity should it be required.
• Despite slower output growth this year, this decade will have seen sustained global GDP growth averaging 3.8 per cent a year.