For the fifth consecutive time the International Monetary Fund (IMF) has downgraded its predictions for the global economy. Washington-based IMF cut its global economic growth forecast for 2019 to 3%, down from 3.2%, reflecting the ongoing risks of trade wars, Brexit and emerging-market shocks. Gita Gopinath, the IMF chief economist believes the downside risks to the outlook ‘are elevated’. In a statement she said: ‘Trade barriers and heightened geopolitical tensions, including Brexit-related risks, could further disrupt supply chains and hamper confidence, investment, and growth’, adding, ‘With a synchronised slowdown and uncertain recovery, the global outlook remains precarious. At 3 per cent growth, there is no room for policy mistakes and an urgent need for policymakers to cooperatively de-escalate trade and geopolitical tensions’. The IMF predicts the current trade war between China and the US will cut global growth by 0.8 percentage points next year alone. Looking further out, the Fund anticipates a rise in the global growth of 3.4% in 2020, down 0.1% from earlier estimates.
The IMF also predicted mixed outlooks for the world’s major economies. US projected growth is 2.4% this year and 2.1% in 2020, helped by the two-year budget deal and rate cuts. For China, the outlook is for 6.1% and 5.8%, respectively. However, some of the biggest growth downgrades were for developed economies in Asia, with South Korea, Singapore and Hong Kong. These 3 all sliced due to their hefty exposure to a slowing China, plus the fallout from trade wars.
Also, we read that according to the U.N.’s World Intellectual Property Organization (WIPO), China accounted for nearly half of global patent filings last year, with over 1.5m applications, a record lead by computer technology and telecoms. China’s share, up over 11.5% represents more than 1-in-10 of all filings and far larger than the nearly 600,000 patent applications that were requested in the US, which was second globally. All in all, worldwide, there were 3.3m patent applications filed, over 14m trademark applications and approximately 1.3m industrial design applications. Asia accounted for more than two-thirds of all applications.
I wonder what Charles H. Duell would think about it all. He was the Commissioner of US patent office, who in 1899 is famously quoted as saying ‘Everything that can be invented has been invented’. Methinks he was a little wide of the mark!