PwC:2020 to be year of ‘slowbalisation’ for global economy
Global economic growth in 2020 is expected to grow at a rate of around 3.4% in purchasing power parity terms,according to new projections by PwC, compared to its long-term average of a 21st century average of 3.8% per year.
PwC predict that 2020 will be a year of ‘slowbalisation’ in the global economy, where trade tensions continue to create challenges for global supply chains and further integration of the global economy.
Nevertheless, PwC expect that services will remain a bright spot for global trade, with the total global value of service export forecast to hit a record $7 trillion in 2020. The US and UK are likely to remain the leading exporters of services, although China is expected to overtake France in fourth place during the year.
More jobs across the board but not necessarily spread equitably
PwC expect the G7 to continue to create jobs, to the tune of around 2 million. Four out of the five new jobs in the G7 will be created in the US, UK and Japan. As the pool of labour resources in the G7 gradually dries up, earnings will continue their upward trajectory. But in the absence of productivity improvements, corporate profit margins could be squeezed. Similarly, the International Labour Organization (“ILO”) expects the seven largest emerging economies– the E7–to create about 8 million jobs in net terms. The ILO’s employment projections for the G7 show that jobs will be taken up by men and women in equal measure. Within the E7, however, the ILO expects job creations to be less evenly distributed across genders.
Global population biggest it has ever been but also the greyest
In 2020, the world’s population is expected to reach 7.7 billion, which is around a 10% increase compared to a decade ago. China, India and Sub-Saharan Africa are expected to drive around half of the world’s annual population increase. At the same time, the number of people above the age of 60 globally is expected to surpass the one billion mark. China is expected to have a larger number of people above the age of 65 than all the six other largest emerging economies put together.
The overall picture for 2020 is that global economic growth will continue at a modest pace, as the major economies will be buoyed by accommodative financial conditions and an increased reliance on household consumption as a source of growth instead of net exports and investment.