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Ten Investor Takeaways From the 2018 Annual IMF/World Bank Meetings

By Advisor Perspectives
Capital Markets, Financial Services

Global central bankers, finance ministers and representatives from the private sector and civic groups gathered in Bali recently for the annual meetings of the IMF (International Monetary Fund)/World Bank Group. Below are 10 key takeaways from the discussions.

1) Investor global risk sentiment is cautious with no large directional views. This reflects higher uncertainty on U.S. and China trade policy, the outlook for the Federal Reserve’s tightening cycle, the Italian budget and EU negotiations, and generalized weakness in emerging markets (EM). This caution notwithstanding, there was no imminent cliff event in focus with baseline expectations being for negotiated (but drawn-out) outcomes that will keep near-term uncertainty high.

2) The macro outlook for the global economy is constructive with the projection for growth in 2019 slowing to around 3.5% but remaining at relatively robust rates (in line with PIMCO’s recently published Cyclical Outlook, “Growing, But Slowing”), and global inflation being contained in developed markets and most of EM. Key questions on investors’ minds included whether above-trend U.S. growth would continue as the fiscal tailwind diminished and the extent and impact of China’s countercyclical measures to shore up growth. A potential U.S. recession was viewed as a question for 2020 and beyond rather than for 2019, but overall it is now widely accepted that global growth has passed its peak. In EM, the recovery was expected to continue at a more gradual pace with policymakers’ focus turning to much lower potential growth than previously acknowledged.

Read more at Advisor Perspectives.

Photo: Bruno Sanchez-Andrade Nuno

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