Strong growth in the USA, clear slowdown in Europe and Japan as well as increasing risks

During the second quarter of this year, worldwide economic growth was strong, especially thanks to the US and the emerging markets of Asia. But this is a misleading picture. The peak of growth was reached in the second half of 2017. This is confirmed by the PMI surveys since the beginning of the year. We therefore assume that the deceleration of activity will continue in the second quarter, the US included. This slowdown could amplify as of the end of the second half of this year. Several factors support this scenario. The first is the rapid rise of inflation, especially in the US. The direct consequence of this acceleration is raising interest rates, which should negatively impact consumers and investors. Next there are the trade tensions, instigated by the US, which could lead international commerce of track. Even if the amounts of imports subject to the new taxes are marginal compared to the worldwide total, it is difficult to grasp the impact countermeasures and indirect consequences will have. In total GDP in the OCDE countries should expand by 2.4% this year (compared to 2.2% in 2017), and decelerate to 2.1% in 2019. The evolution of GDP in the emerging markets should be similar with a progression of 5.3% this year, before it slows down to 5.2% in 2019. These forecasts are our central scenario. But the likelihood of more pessimistic scenarios increases with rising risks linked to US rate hikes and the trade war.