TORONTO, Jan. 13, 2020 /CNW/ - Scotiabank Economics today published its Q1 Global Economic Outlook report. This comprehensive report explores the key factors affecting the global outlook for 2020 and 2021.

"Developments in recent weeks serve as a stark reminder that the central economic and financial thesis of the last year remains unchanged – uncertainty is here to stay so long as President Trump remains in office," said Jean-François Perrault, Senior Vice President and Chief Economist at Scotiabank. "A few days into the new year, President Trump has already reminded us that event risk will remain a feature of his presidency."

"We take comfort in the détente between China and the United States on the trade front, but this development has no tangible impact on our view, other than reducing a major tail risk," he continued. "We still believe that a modest expansion will continue in much of the global economy."

Highlights of Scotiabank's Q1 Global Economic Outlook include:

• Canada: Growth will remain flat relative to 2019, but risks remain tilted to the downside as consumer confidence fell sharply at the end of 2019. 
• United States: US-initiated trade wars have exacted a significant toll on manufacturing and have inhibited business investment, but domestic demand is expected to cushion downside risks.
• Canada & US Monetary Policy: We forecast that both the Bank of Canada and the US Federal Reserve will cut key interest rates in the first half of 2020 and hold rates at 1.25% through our forecast horizon. 
• China: China's annual economic growth is set to drop below 6% by 2021 on the back of global uncertainties, continued trade headwinds and the economy's ongoing structural transition.
• Commodities: 2020 brings familiar risks for commodity market, trade policy and geopolitical uncertainty will remain key drivers for the year.

Read the full January 2020 Scotiabank Economics Q1 Global Economic Outlook Report: A Most Uncertain World, Take 2 online here.

Scotiabank Economics provides in-depth commentary on economic, financial market and policy developments, both domestically and internationally. Follow this research on Twitter at @ScotiaEconomics.

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SOURCE Scotiabank