2019 in Review: The Global Economy Explained in 5 Charts

IMF Blog, December 18, 2019

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Global growth in 2019 recorded its weakest pace since the global financial crisis a decade ago.
Rising trade barriers and associated uncertainty weighed on business sentiment and activity globally.
Country-specific weaknesses contributed notably in large emerging market economies: Brazil, India, Mexico, and Russia.
Additional pressures arose from:
- tighter financial conditions (Argentina),
- geopolitical tensions (Iran),
- social unrest (Venezuela, Libya, Yemen).

Firms became cautious on long-range spending as the economic environment became more uncertain.
Global purchases of machinery and equipment decelerated.
Household demand for durable goods weakened, with a pick up in the second quarter of 2019.
Automobiles were particularly affected by regulatory changes, new emission standards, and possibly the shift to ride-shares.
Firms scaled back industrial production in response to sluggish demand for durable goods.
Global trade—which is intensive in durable final goods and the components used to produce them—slowed to a standstill.

Central banks reacted aggressively to weaker activity during the year.
Several central banks including the US Federal Reserve, the European Central Bank (ECB), and large emerging market central banks cut interest rates.
The ECB also restarted asset purchases.
These policies averted a deeper slowdown.
Lower interest rates and supportive financial conditions reinforced still-resilient purchases of nondurable goods and services, encouraging job creation.
Tight labor markets and gradually rising wages supported consumer confidence and household spending.

Gita Gopinath, Gian Maria Milesi-Ferretti, Malhar Nabar — December 18, 2019