The slowdown afflicting the world economy showed up in disappointing data on US jobs and German manufacturing on Friday, piling fresh pressure on to central bankers to launch a stimulus push to offset trade tensions and weakening demand.
The soft data came ahead of policy meetings at the European Central Bank and the Federal Reserve later this month, when investors expect officials in the eurozone and the US to launch new monetary easing to tackle the downturn. China is also pressing ahead with its own form of stimulus, announcing on Friday that it would loosen curbs on bank lending as it grappled with the effect of the trade war with the US.
In July the IMF said it predicted the world economy to grow by 3.2 per cent this year, significantly slower than its estimate at the beginning of 2019. While the Fund has predicted a rebound to 3.5 per cent growth in 2020, it has warned that such a recovery was “precarious” since it was premised on stabilisation in emerging markets and progress on resolving trade disputes.