Although growth in developed economies is on average declining in comparison to past years, there are certainly clear differences between individual countries.

United States: The rev counter is falling

The US economy has boomed over the past year, but is beginning to show the first signs of metal fatigue. The most recent jobs data showed that the number of jobs increased by 155,000, against an expected figure of 200,000. The US central bank has also become somewhat more cautious regarding the number of rate hikes in 2019. Looking ahead, we expect the budgetary stimulus from the tax measures by the Trump administration to start to wear off, meaning that growth in business investment will also decline sharply in the coming quarters. In addition, companies have brought forward international orders due to fears of higher prices as a result of the protectionist US policy, so the contribution of net exports will probably fall sharply in the coming quarters. We expect growth to reach 2.4 per cent in 2019, since the growth of private consumption is still relatively strong due to the positive condition of the labour market and rising wages. Towards the end of 2020 however, we expect the US economy to slow sharply, with average growth in that year reaching 1.8 per cent.

Eurozone: A slowdown is not yet a crisis

The Eurozone economy’s performance this year has been significantly less than in the exuberant year of 2017. The generally disappointing figures for the third quarter indeed raise the question of whether this presages an economic slump. We do not believe this is the case. But the figures emphasise the fact that economic growth in the Eurozone is past its peak.

United Kingdom: What more can we say?

There is no avoiding the issue. Brexit has the British public completely in its grasp. British politicians are meanwhile paying little attention to the negative effects that Brexit is already having on the economy: the uncertainty around the future trade relationship between the UK and the EU is making businesses reluctant to invest in the UK. This is evident from the GDP figure, which remains stuck at a meagre 1.3 per cent this year and is not expected to improve next year.

Japan: The economy muddles along

The Japanese economy has not lived up to expectations in 2018, contracting in both the first and the third quarter of 2018. In addition to the modest development of core inflation that is increasingly a cause for concern for the Bank of Japan, the planned increase in VAT in October 2019 is an important thing to watch. During a previous VAT increase 2014, the economy went into recession.

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