World economy to grow 3.5% next year: report

Growth slowdown is attributable to expected weakening of US economy

The world economy will see an annual growth of 3.5% in 2019, according to a forecast by economists of the Chinese Academy of Social Sciences. The forecast was contained in a book released on Thursday.

The slowdown in world economic growth next year is attributable to expected weakening of the US economy－ the world’s largest－ after its elevated growth this year as well as financial market turbulence, limited policy tools of major economies to handle an easing and trade frictions among major trading powers, according to authors of the Yellow Book of World Economy 2019, published by the Social Sciences Academic Press (China).

In the US, major economic indicators such as gross domestic product (GDP) and employment have been close to historic highs. That means 2018 may be a peak for the US economy, said Sun Jie, an author of the book and economist at the Institute of World Economics and Politics on Thursday.



The Conference Board, a New York-based economic research institution, also said the US economy may peak at the end of this year.

World economic growth may also be affected by possible financial market turbulence caused by expected US interest rate hikes, which could lead to currency depreciation and monetary crisis in other countries, debt defaults in some highly indebted countries and possible asset price slumps in other countries, the book said.

Meanwhile, compared with 10 years ago, the world’s economies have less policy room to cope next year with any crisis, it said.



Trade disputes between China and the US and those involving other countries, if they escalate, could spill over to affect global trade growth, reduce investment confidence and even lead to financial and political conflicts in a worst case scenario, which would prove disastrous to the world economy, the book said.

“China should stick to its policy of reform and opening up to cope with the impact from changes in the global economy,” said Zhang Yuyan, Director of the institute.

This article originally appeared on China Economic Net