Publication - Publication

State of the economy: February 2020

Published: 14 Feb 2020
From:
Gary Gillespie
Directorate:
Chief Economist Directorate
Part of:
Economy
ISBN:
9781839605666

Report produced tri-annually by the Chief Economic Adviser to provide a picture of the Scottish economy in an international context.

23 page PDF

2.3 MB

23 page PDF

2.3 MB

Contents
State of the economy: February 2020
Global Summary

23 page PDF

2.3 MB

Global Summary

Global growth is forecast to strengthen in 2020.

  • The IMF estimate global growth to have slowed in 2019 to 2.9%, its slowest pace of growth since 2009.
  • Slower growth over the year has been relatively broad based in Advanced and Emerging Market & Developing Economies and particularly notable in the manufacturing sector.
  • There are signals that growth is stabilising and sentiment has improved, supported by factors such as the US-China phase 1 trade agreement.
  • The IMF forecast global growth to strengthen in 2020 to 3.3%, however downside risks such as trade uncertainty remain, alongside new risks such as the Coronavirus.

US economic growth forecast to ease in 2020.

  • US GDP grew by 0.5% in Q4 2019 and grew 2.3% over 2019 as a whole, slowing slightly from 2.5% growth in 2018.
  • US unemployment remained close to its record low rate (3.5%) in January 2020 rising slightly to 3.6%.
  • US CPI inflation picked up to 2.3% in December, its highest rate since October 2018, with increased energy costs a key contributor to the rise over the month.
  • The IMF forecast US GDP growth to slow to 2.0% in 2020 and 1.7% in 2021 reflecting an assumed transition from recent fiscal expansion to a more fiscally neutral position.

Euro Area GDP growth forecast to pick-up mildly in 2020.

  • Euro Area GDP growth slowed in 2019 to 1.2%, down from 1.9% growth in 2018.
  • Euro Area unemployment was 7.4% in December, down from 7.5% in November and at the lowest rate recorded since mid-2008.
  • Euro Area inflation picked up further to 1.4% in January 2020, having fallen to 0.7% in October 2019, with the highest rate increase from food, alcohol and tobacco.
  • The IMF forecast Euro Area GDP growth to pick-up mildly in 2020 to 1.3%, supported by stronger growth in Germany.

IMF: Annual GDP Growth and Forecast

World Trade: Volume and Uncertainty

Global Purchasing Manager's Index: Output index per sector

January 2020, GDP Growth (%) Estimate Projections Revisions from October 2019
2019 2020 2021 2020 2021
World Output 2.9 3.3 3.4 -0.1 -0.2
Advanced Economies 1.7 1.6 1.6 -0.1 0.0
United States 2.3 2.0 1.7 -0.1 0.0
Euro Area 1.2 1.3 1.4 -0.1 0.1
United Kingdom 1.3 1.4 1.5 0.0 0.0
Japan 1.0 0.7 0.5 0.2 0.0
Emerging Markets and Developing Economies 3.7 4.4 4.6 -0.2 -0.2
China 6.1 6.0 5.8 0.2 -0.1
India 4.8 5.8 6.5 -1.2 -0.9
Brazil 1.2 2.2 2.3 0.2 -0.1
Russia 1.1 1.9 2.0 0.0 0.0
South Africa 0.4 0.8 1.0 -0.3 -0.4

Contact

Email: OCEABusiness@gov.scot