The economic performance across G7 nations and leading emerging markets is expected to be muted in the fourth quarter (Q4) of 2019 because of global trade tensions and sharp deceleration in real gross domestic (GDP) growth in the United States, China and India, according to a recent report released by The Economist Intelligence Unit (The EIU).
The real GDP grew by 1.6 per cent quarter-on-quarter in India, but the uptick was largely owing to base effect, the report said.The economic performance across G7 nations and leading emerging markets is expected to be muted in the fourth quarter (Q4) of 2019 because of global trade tensions and sharp deceleration in real gross domestic (GDP) growth in the United States, China and India, according to a recent report released by The Economist Intelligence Unit (The EIU).#
"... this apparently strong headline figure was artificially boosted by the dismal performance of the Indian economy in the previous quarter amid weak consumer sentiment and tepid investment," the report said. The report, however, noted that series of government stimulus measures and a low interest rate environment are likely to spur demand and investment in 2020.
A rebound in full-year real GDP growth, to 6.1 per cent (up from an estimated 4.9 per cent in 2019) is likely, it added. According to The EIU, on a year-on-year basis, India's real GDP growth for the October-December 2019 period stood at 4.6 per cent, and for the January-March quarter of 2020 it was 5.5 per cent.
For China, the world’s second-largest economy, the report forecasts up to 1.5 per cent growth pick-up in the fourth quarter of 2019, from 1.3 per cent in the third quarter, as the conclusion of a first-phase of US-China trade deal at the end of last year helped to alleviate part of the uncertainty that businesses and consumers were facing.
In Asia, India recorded, the best rate of quarterly growth in October-December, while Japan had the worst, as per the report.
The EIU team forecasts weak fourth-quarter economic performance across the G7 and BRICS countries, owing to the combined effect of global trade tensions and sharp deceleration in real GDP growth in the US, China and India.
According to The EIU Q4 Global Forecast, factors like global trade tensions, renewed volatility in emerging markets; and political uncertainty in a number of EU countries were also responsible for the sluggish growth rate.
Among the G7 countries, the United States is expected to record the fastest level of quarterly growth in the fourth quarter of 2019, at 0.4 per cent, the report added.
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