Economic Analysis of Major Countries in 2019
Published on December 13, 2019
Published by Economic Analysis Coordination Division of Economic Analysis Department
Ⅰ. Global Economic Environment
The IMF has forecasted the global economic growth rate to fall to 3.0% in 2019 and to recover to 3.4% in 2020 due to uncertainties such as the US-China trade disputes, reduced global trade volume, and Brexit. Global trade volume growth is expected to recover to 3.2% in 2020 due to rising investment demand in emerging economies, after decreasing from 3.6% in 2018 to 1.1% in 2019. Meanwhile, global uncertainties have heightened, causing short and long-term interest rate reversals in some countries, increasing stock price volatility, rising exchange rates in emerging countries, and falling commodity prices.
Ⅱ. Economic Situation of Developed Countries
The US economy continues to grow, but the pace of growth has slowed down recently as industrial production and exports became sluggish. In US financial markets, interest rates are falling, while the stock market and the dollar are showing overall strength. The Japanese economy has continued to grow overall since 2012 due to Abenomics policies with the yen strengthening in financial markets, despite treasury bond yield rates falling to negative levels. The German economy has shown solid growth since the global financial crisis (GFC), but has recently slowed down. In German financial markets, treasury bond yield rates have fallen to negative levels and the euro is weak.
Ⅲ. Economic Situation of Emerging Economies
China's key economic indicators have been deteriorating in recent years, but financial soundness at home and abroad is still favorable. India has maintained a high growth rate of 5~10% since the GFC, but economic growth has slowed slightly in 2019. In Brazil, economic growth has become positive since the recession in 2017, but financial soundness of the internal sector is weak. Russia continues to grow, but the pace of its growth rate has slowed down in 2019.
Ⅳ. International Comparative Analysis of Major Economic Policies
This report compares fiscal spending effects, monetary policy stances and capital outflow for OECD and BRIICS countries. Korean fiscal spending has the greatest impact on investment as compared to consumption and net exports, while Korea’s fiscal spending effect on net exports is greater than that of major developed countries such as the US, Japan, Germany, and the UK.
As for monetary policies, the negative economic outlook expanded monetary easing stances, and the amount of central bank assets in countries with quantitative easing policies increased significantly. Meanwhile, the growth rate of the money supply in major countries in 2019 declined YOY, and money velocity has remained on the decline since the GFC.
Korea has been a net capital outflow country for the past decade, with an actual net outflow of capital exceeding the potential level of outflows.