Macroeconomic Outlook 2020: Fragile 20/20 vision

In this 2020 outlook we discuss our macroeconomic forecasts for the coming couple of years.

Executive Summary

Fears of a 2019 global recession have abated as major macro risks have started fading. However, for 2020 we think actual GDP growth is unlikely to be able to exceed potential in the key economic regions. Too much damage has been done, old headwinds are still with us and new sources of uncertainty have emerged. Our baseline for 2021 is that global growth slows down to quasi-stagnation. A lack of policy fire-power will be a dominant theme in the coming two years. Monetary policy and other policy initiatives have likely decreased the chances of developed economies stalling in 2020. As a result, we see ‘bear-market’ moves as a tail-risk rather than a base case. However, the macro outlook, coupled with current valuations, means we are unlikely to see 2020 returns matching those of 2019.

Click on the below links to read the full executive summary:
  - Stalling as the traffic light turns green(ish) by Gilles Moec, AXA Chief Group Economist
  - Investment Outlook – 2020: Approach with cautious optimism by Chris Iggo, CIO Core Investments, AXA IM