Deloitte today in its latest business outlook:
Global growth is still slowing. Even though the trade wars are worsening, the largest single driver of the slowdown is no longer push and shove over trade. Rather, families and businesses have lost confidence in the ability of political leaders to govern wisely. Amid that rising uncertainty, business in particular has wound back the money they spend today to help them sell more in the future. The resultant pullback in investment plans is a global phenomenon. And it is now the largest driver of the downturn.
Worse still, risks are still rising. Brexit, Kashmir, Hong Kong, Iran and the Saudis … the rollcall of possible flashpoints is growing ever longer. Yet, as we often stress, headlines and economies are two different things. Although more could go wrong than already has – the risks of that are rising – to date the global economy has been dominated more by the risk of things going wrong than actual poor outcomes. So you shouldn’t overstate the weakness in the current path of global growth. It’s below trend, but not markedly. The world may be run by dictators and dumbos, but to date the damage that has caused has been well contained.
