Global economic growth should be somewhat softer next year as tighter financial conditions bite.<\/p>\n
That\u2019s the view of economists at Goldman Sachs Group Inc led by Jan Hatzius, who note that fiscal policy is emerging as a key support for growth as other governments join the US in pulling fiscal levers.<\/p>\n
“Looking ahead to 2019, we expect a similar contribution of fiscal stimulus to global growth as in 2018, but the composition shifts from being US-centric to being more broadly based across developing markets and emerging markets,” the analysts wrote in a note.<\/p>\n
While that will provide some cushioning for the global economy, it\u2019s hard to map out an absolute path for the world\u2019s gross domestic product growth next year.<\/p>\n
“An increase in the price of oil, for example, could present a downside risk; and on the upside, continued slack and a long-awaited improvement in productivity could leave economies with more room to grow,” the economists wrote.<\/p>\n
“That said, our analysis suggests that growth in 2019 should be somewhat softer than it has been in 2018.”<\/p>\n
Goldman\u2019s preliminary global current activity indicator slipped to 3.7% in October from just above 4% mid-year and around 5% at the start of 2018.<\/p>\n