From trade wars to Brexit talks, here are the answers to the key questions for the world economy in 2019.
Will the global economy slump?
No. For sure, financial markets are skittish, central banks are turning away from easy money and there is a trade war under way. But the International Monetary Fund still forecasts a third year of growth around 3.7 per cent, and even if the world falls short of that it’s still set for a fairly decent expansion. Ballast should come from monetary policy staying historically loose, governments easing fiscal policy and tight labor markets.
What Bloomberg Economists say: 2018 started with strong, coordinated global growth. 2019 will not. The world economy will expand at a slower pace, and with a marked divergence between the US and the rest. Heightened financial market volatility and shrinking export orders flag that the peak of the cycle is past. They are not an indicator of impending recession.
Will the trade war escalate or fade?
This is arguably the biggest question confronting the global economy in 2019. And the fact there is no clear answer ought to be reason to worry. The tentative truce between President Donald Trump and China’s Xi Jinping is encouraging in the short term. Nervy financial markets and concerns over the moderating of both economies have been pushing the two leaders in the direction of a deal. Then again, even with a grand bargain, the majority of the US tariffs on $250 billion in imports from China will remain in place through 2019. As will the threat of more to come if China doesn’t deliver meaningful reforms. Likewise, there are likely to be more ups and downs in relations through the year. There will be more tweets from Mr Trump and invocations of China’s history of standing up to foreign pressure from Mr Xi. The trade wars are becoming a permanent feature of relations between the world’s two largest economies.
What Bloomberg economists say: The trade truce between the US and China will hold. China won’t deliver the deep structural reforms US hawks are demanding. It will do enough for the US to claim a win and kick more protectionist measures further down the road. Even in that optimistic scenario, the front-loading of exports in 2018 will reduce shipments in 2019.
Will the Federal Reserve pause hiking interest rates?
The Fed projects two rate increases in 2019 and another move in 2020, based on a confident outlook of continuing solid growth. Investors think that optimism misses underlying economic weakness. Fear the Fed will tighten too far has triggered steep losses in US stocks. Also expect more Twitter pressure from Mr Trump on Chairman Jerome Powell if monetary policy keeps getting tightened.
What Bloomberg economists say: The recent tightening in financial conditions and cooling global growth will not be enough to cause the Fed to pause rate hikes in 2019. While the economy is expected to moderate, growth will remain above its long-run trend and a strong 2018 suggests that some additional inflationary pressures may be in the pipeline. This argues for a few more rate hikes to ensure that inflation does not unexpectedly rise.
Can China control its slowdown without massive stimulus?
It’s going to be a close-run thing, though the first quarter should provide a strong signal. By then, the extent of the negative impact of the trade war on exports should become clearer as the effect of ‘‘front-loading’’ of shipments begins to wane. Progress, or otherwise, in trade negotiations between China and the US ought to become evident as a March 1 deadline approaches. Policy makers are showing every sign of wanting to continue with targeted, limited stimulus measures. A lot rests on the consumer though. Retail sales growth ended 2018 near the slowest pace in over a decade, suggesting that rising household debt coupled with cost-of-living surges in the biggest cities is really beginning to bite. It may take a more explicit pro-growth strategy from the government to break that negative cycle.
What Bloomberg economists say: China can probably achieve a gradual deceleration in growth, but the path the trade war takes is pivotal for the growth composition. Less pressures on exports in the scenario of easing trade tensions would give policy makers more room to respond in a measured way that entails less reliance on investment-driven economic stabilization -- a positive for long-term growth. Yet in a scenario of intensified trade tensions, policy makers would probably shift to strong stimulus, particularly if combined effects of external and domestic demand pressures lead to widespread unemployment and corporate distress.
Will there be a Brexit deal?
The probability has increased of a no-deal Brexit which the Bank of England says could have catastrophic consequences for the economy. While most economists still expect disaster to be avoided, even that won’t clear the way for gangbusters growth. With retailers struggling, house price growth slowing and inflation still above the BOE’s target, the expansion is expected to remain at best subdued and well below the pace seen before 2016’s referendum.
What Bloomberg economists say: Among all the Brexit noise, one clear message has emerged: a majority of UK lawmakers are against a no-deal outcome. That leaves us quietly confident that a pact between the UK and EU will emerge next year. For the economy, the news would likely deliver a cyclical boost as more certainty, looser fiscal policy and faster real-income growth all help to raise gross domestic product growth to close to 2 per cent.
Will Emerging Markets Suffer a Fresh Crisis?
Emerging markets at least have a more dovish Fed and softer oil prices to offer calm in 2019, and market analysts are on their side: EM assets are forecast to make a comeback in 2019, following their worst year in three, according to a Bloomberg survey of 30 investors, traders and strategists. Morgan Stanley even says such economies will return to drive world growth. Yet pockets of stress still risk explosion. Argentina and Turkey always face political risks, while South Korea is ridden with debt and Russia could be slapped by fresh US sanctions. South Africa is dealing with a wobbly economy and election uncertainty. Latin American currencies, such as the Mexican, Colombian and Argentine peso, remain vulnerable as questions linger over the ability of governments to control spending.
What Bloomberg economists say: Uncertainty about Fed tightening, trade and oil prices will spill into the new year. A slowdown in global growth could fuel further risk for emerging markets. But the next crisis is likely to start closer to home, with politics delivering the spark.
Will the ECB get to hike interest rates?
It depends on whom you ask. The European Central Bank says euro-zone interest rates will be kept at record lows “at least through the summer of 2019,” implying that the liftoff could come late in the year. Economists share the ECB’s analysis that domestically driven growth is solid despite recent weak data, and predict the first increase in September. Investors take a different view. They’re concerned the single currency area is on the verge of a more protracted slowdown amid trade tensions and political instability. They’re pricing a move around April 2020, by which time it will be the job of President Mario Draghi’s successor.
What Bloomberg economists say: Definitely, if the outlook unfolds as Mr Draghi and his colleagues at the European Central Bank expect. Growth of 0.5 per cent a quarter for much of next year and solid gains in pay would mean there is little reason to delay. Our own forecasts see growth settling at 0.4 per cent a quarter -- that suggests a hike to the deposit rate will still come in 2019, but a little later.
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Read more:
2018 in review: hopes for Hyperloop the only good news for tech
Nine of the best videos from The National in 2018
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UAE currency: the story behind the money in your pockets
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
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.”
UAE currency: the story behind the money in your pockets
$1,000 award for 1,000 days on madrasa portal
Daily cash awards of $1,000 dollars will sweeten the Madrasa e-learning project by tempting more pupils to an education portal to deepen their understanding of math and sciences.
School children are required to watch an educational video each day and answer a question related to it. They then enter into a raffle draw for the $1,000 prize.
“We are targeting everyone who wants to learn. This will be $1,000 for 1,000 days so there will be a winner every day for 1,000 days,” said Sara Al Nuaimi, project manager of the Madrasa e-learning platform that was launched on Tuesday by the Vice President and Ruler of Dubai, to reach Arab pupils from kindergarten to grade 12 with educational videos.
“The objective of the Madrasa is to become the number one reference for all Arab students in the world. The 5,000 videos we have online is just the beginning, we have big ambitions. Today in the Arab world there are 50 million students. We want to reach everyone who is willing to learn.”
COMPANY%20PROFILE
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The cost of Covid testing around the world
Egypt
Dh514 for citizens; Dh865 for tourists
Information can be found through VFS Global.
Jordan
Dh212
Centres include the Speciality Hospital, which now offers drive-through testing.
Cambodia
Dh478
Travel tests are managed by the Ministry of Health and National Institute of Public Health.
Zanzibar
AED 295
Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.
Abu Dhabi
Dh85
Abu Dhabi’s Seha has test centres throughout the UAE.
UK
From Dh400
Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.
Short-term let permits explained
Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.
Tenants also require a letter of no objection from their landlord before being allowed to list the property.
There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.
Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.
The chef's advice
Troy Payne, head chef at Abu Dhabi’s newest healthy eatery Sanderson’s in Al Seef Resort & Spa, says singles need to change their mindset about how they approach the supermarket.
“They feel like they can’t buy one cucumber,” he says. “But I can walk into a shop – I feed two people at home – and I’ll walk into a shop and I buy one cucumber, I’ll buy one onion.”
Mr Payne asks for the sticker to be placed directly on each item, rather than face the temptation of filling one of the two-kilogram capacity plastic bags on offer.
The chef also advises singletons not get too hung up on “organic”, particularly high-priced varieties that have been flown in from far-flung locales. Local produce is often grown sustainably, and far cheaper, he says.
Killing of Qassem Suleimani
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
more from Janine di Giovanni
Timeline
1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line
1962
250 GTO is unveiled
1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company
1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens
1976
First automatic Ferrari, the 400 Automatic, is made
1987
F40 launched
1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent
2002
The Enzo model is announced
2010
Ferrari World opens in Abu Dhabi
2011
First four-wheel drive Ferrari, the FF, is unveiled
2013
LaFerrari, the first Ferrari hybrid, arrives
2014
Fiat Chrysler announces the split of Ferrari from the parent company
2015
Ferrari launches on Wall Street
2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Abu Dhabi Grand Slam Jiu-Jitsu World Tour Calendar 2018/19
July 29: OTA Gymnasium in Tokyo, Japan
Sep 22-23: LA Convention Centre in Los Angeles, US
Nov 16-18: Carioca Arena Centre in Rio de Janeiro, Brazil
Feb 7-9: Mubadala Arena in Abu Dhabi, UAE
Mar 9-10: Copper Box Arena in London, UK
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Q&A with Dash Berlin
Welcome back. What was it like to return to RAK and to play for fans out here again?
It’s an amazing feeling to be back in the passionate UAE again. Seeing the fans having a great time that is what it’s all about.
You're currently touring the globe as part of your Legends of the Feels Tour. How important is it to you to include the Middle East in the schedule?
The tour is doing really well and is extensive and intensive at the same time travelling all over the globe. My Middle Eastern fans are very dear to me, it’s good to be back.
You mix tracks that people know and love, but you also have a visually impressive set too (graphics etc). Is that the secret recipe to Dash Berlin's live gigs?
People enjoying the combination of the music and visuals are the key factor in the success of the Legends Of The Feel tour 2018.
Have you had some time to explore Ras al Khaimah too? If so, what have you been up to?
Coming fresh out of Las Vegas where I continue my 7th annual year DJ residency at Marquee, I decided it was a perfect moment to catch some sun rays and enjoy the warm hospitality of Bab Al Bahr.
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Elvis
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Results:
Men's 100m T34: 1. Walid Ktila (TUN) 15 sec; 2. Rheed McCracken (AUS) 15.40; 3. Mohammed Al Hammadi (UAE) 15.75. Men's 400m T34: 1. Walid Ktila (TUN) 50.56; 2. Mohammed Al Hammadi (UAE) 50.94; 3. Henry Manni (FIN) 52.24.
WWE Evolution results
- Trish Stratus and Lita beat Alicia Fox and Mickie James in a tag match
- Nia Jax won a battle royal, eliminating Ember Moon last to win
- Toni Storm beat Io Shirai to win the Mae Young Classic
- Natalya, Sasha Banks and Bayley beat The Riott Squad in a six-woman tag match
- Shayna Baszler won the NXT Women’s title by defeating Kairi Sane
- Becky Lynch retained the SmackDown Women’s Championship against Charlotte Flair in a Last Woman Standing match
- Ronda Rousey retained the Raw Women’s title by beating Nikki Bella
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
