The global economy may have already bottomed out, says Goldman Sachs chief economist Jan Hatzius. Some emerging green shoots suggest sequential growth will pick up now, Hatzius and Sven Jari Stehn wrote in a note dated February 26. The risk to Goldman’s 2019 global gross domestic product forecast of 3.5 per cent, however, ‘is probably still on the downside’.
While growth remains soft, the group’s February activity indicator was slightly above the downwardly-revised December and January numbers, according to global news wires.The global economy may have already bottomed out, says Goldman Sachs chief economist Jan Hatzius. Some emerging green shoots suggest sequential growth will pick up now, Hatzius and Sven Jari Stehn wrote in a note dated February 26. The risk to Goldman's 2019 global gross domestic product forecast of 3.5 per cent, however, 'is probably still on the downside'.#
As the drag from a tightening of financial conditions eases in the United States, the case for a pick-up from the current pace is strongest there, said Hatzius.
There are also tentative signs of a growth turnaround in China, according to the note, which said Europe looks like the weakest major region, “with Italy in recession, Germany close to it and most other economies growing at only about a trend pace”. Goldman has pushed back its expectations for the first European Central Bank (ECB) hike from late-2019 to mid-2020.
The note expects bond yields to rise and is modestly bullish on oil over the next two to three months, but sees a more bearish outlook for the remainder of the year. (DS)
ALCHEMPro News Desk – India
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