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Scotiabank Economics Q3 Global Economic Outlook Report: The Perils of Trumponomics

TORONTO, July 12, 2019 /CNW/ - Scotiabank Economics today published its Q3 Global Economic Outlookreport. This comprehensive report shows the ongoing and increasing negative impact of the protracted trade war on economic activity in the US and across the globe.

"Following two years of fiscally-induced sugar highs, the US economy is slowing rapidly as that stimulus wanes and Trump's trade policies, threats, and bluffs begin to weigh on US economic activity," said Jean-François Perrault, Senior Vice President and Chief Economist at Scotiabank. "Markets are now convinced that the Federal Reserve will cut rates to offset some of these shocks, boost inflation, and insure against possible future damages caused by the President's interventions.

"We believe the Bank of Canada is unlikely to follow the Fed as it cuts rates," he continued. "Canada is a Northern Star and we expect Canadian growth to outpace that of the US for the remainder of the year."

Highlights of Scotiabank's Global Outlook include:

  • Canada: Growth is rebounding strongly following the softpatch, with growth expected to exceed that of the US for the remainder of the year. The Bank of Canada is expected to keep rates at current levels.
  • United States: The Federal Reserve will but rates by 75 bps this year as it tries to raise inflation and takes out some insurance against headwinds to growth.
  • United Kingdom: GDP growth will remain weak through 2019 and 2020 as rising Brexit and global trade risks continue to depress business investment 
  • Eurozone: Will post its slowest economic expansion in five years amid decelerating global growth and heightened trade risks owing to the White House's protectionist policies. 
  • Mexico: Growth to fall below 1% in 2019 owing to domestic policy challenges and global trade uncertainties.
  • China: Economic growth will continue to slow gradually as both domestic and external demand dynamics soften
  • Commodities: Industrial metals will benefit from improving economic sentiment while strong US production growth is expected to keep WTI oil prices rangebound in the mid-$50s/bbl and gold gets a boost from weaker rate expectations.

Read Scotiabank's Global Outlook online here.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues. Follow this research on Twitter at @ScotiaEconomics.

About Scotiabank

Scotiabank is Canada's international bank and a leading financial services provider in the Americas. We are dedicated to helping our more than 25 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With a team of more than 99,000 employees and assets of over $1 trillion (as at April 30, 2019), Scotiabank trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS). For more information, please visit and follow us on Twitter @ScotiabankViews.

SOURCE Scotiabank

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