The direction for the global economy in 2019 is clear; GDP growth will slow in most major countries, led by the US and China, according to ratings agency S&P's Global Economic Outlook 2019.
Overall, the rate of expansion for the global economy will fall to 3.6 per cent next year from a six-year high of 3.8 per cent in 2018.
The report says the world's largest economy will see its rate of expansion fall to around 2 per cent by the end of this year after it peaked at 4.2 per cent in the second quarter of last year.
"Most of the action will come from the US," said Paul Gruenwald, chief economist for S&P Global Ratings. "The drivers will be the waning fiscal stimulus from personal and corporate tax cuts, as well as the continuation of the gradual rate normalisation by the Federal Reserve." Mr Gruenwald said there was a chance that the Fed turns more dovish after the recent rout in the US equity markets and some weakness in the macro data.
However, as The National reported, according to the IMF, the UAE will largely buck the slowdown trend. A recent report from the fund indicated that the UAE's real GDP would grow 3.7 per cent in 2019 compared with 2.9 per cent forecast for last year as momentum in the non-oil economy signalled a positive outlook for this year.
That would come off the back of a strong third quarter in 2018, where Abu Dhabi's overall gross domestic product (GDP) surged 17.3 per cent reaching Dh236 billion at current prices, figures from the Statistics Centre Abu Dhabi (SCAD) revealed at the weekend.
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S&P said China's growth story will likely be less dramatic than that of the US. The authorities in Beijing have taken a number of policy-easing measures, including lowering the reserve requirement for smaller banks and enacting fiscal stimulus in the form of ramped-up infrastructure spending. This mild stimulus will cushion the slowdown, resulting in a continued steady decline in reported growth and a lowering of the official target in 2019 from around 6.5 per cent this year.
Growth in Europe will continue to decline next year with domestic demand the main driver of activity. Consumption will benefit from falling unemployment, rising wages and lower energy prices. The weakness in the third quarter of this year was temporary, S&Psaid; with the German economy contracting, weighed down by a sharp decline in automobile production, the report forecasts growth of 1.6 per cent for 2019, from 1.9 per cent this year.
After India's growth slowed to 7.1 per cent in the September quarter - the second of the fiscal year - down from 8.2 per cent in the April-June period, the economy will expand by a still healthy 7.4 per cent in fiscal 2019, the report said, as the country heads into an election. Outside of the fallout from the recent global market volatility and the rise and fall in oil prices, the Indian economy has been largely unaffected by global developments. S&P said.
The risks to the baseline global forecast are on the downside. "Worries include the entrenchment and expansion of the US-China dispute, as well as market turbulence related to the path of interest rate normalisation by the US Federal Reserve. Brexit and Italy's fiscal woes may have an impact, but remain regional risks for the most part," said Mr Gruenwald.
On the US-China trade war, a good outcome is possible as long as the main actors change their mindset, S&P said. For the US, this means a pivot from imposing broad-based tariffs against China to starting a new Strategic Economic Dialogue (the framework used under former US President George W Bush). For China, this means recognising the country's economic model creates frictions with the existing global order.
The report noted that while a synchronised global upturn may be behind us, it does not necessarily follow that an economic deep winter is coming.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
PSG's line up
GK: Alphonse Areola (youth academy)
Defence - RB: Dani Alves (free transfer); CB: Marquinhos (€31.4 million); CB: Thiago Silva (€42m); LB: Layvin Kurzawa (€23m)
Midfield - Angel di Maria (€47m); Adrien Rabiot (youth academy); Marco Verratti (€12m)
Forwards - Neymar (€222m); Edinson Cavani (€63m); Kylian Mbappe (initial: loan; to buy: €180m)
Total cost: €440.4m (€620.4m if Mbappe makes permanent move)
Company%20profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Belong%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Michael%20Askew%20and%20Matthew%20Gaziano%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Technology%3Cbr%3E%3Cstrong%3ETotal%20funding%3A%3C%2Fstrong%3E%20%243.5%20million%20from%20crowd%20funding%20and%20angel%20investors%3Cstrong%3E%3Cbr%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2012%3C%2Fp%3E%0A
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20OneOrder%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20March%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Tamer%20Amer%20and%20Karim%20Maurice%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Cairo%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E82%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Series%20A%3C%2Fp%3E%0A
More from Neighbourhood Watch:
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
BUNDESLIGA FIXTURES
Friday (UAE kick-off times)
Cologne v Hoffenheim (11.30pm)
Saturday
Hertha Berlin v RB Leipzig (6.30pm)
Schalke v Fortuna Dusseldof (6.30pm)
Mainz v Union Berlin (6.30pm)
Paderborn v Augsburg (6.30pm)
Bayern Munich v Borussia Dortmund (9.30pm)
Sunday
Borussia Monchengladbach v Werder Bremen (4.30pm)
Wolfsburg v Bayer Leverkusen (6.30pm)
SC Freiburg v Eintracht Frankfurt (9on)
Courses%20at%20Istituto%20Marangoni%2C%20Dubai
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