Japan is now caught in a situation in which the US and China are in a tit-for-tat tariff war that seems to get worse each week. The World Bank, in its semiannual Global Economic Prospects report, the Washington based international bank estimated global growth at 2.6 percent, down 0.3 percent from the estimate in January, and note that Japan expectations for growth is at 0.8 percent of down 0.1 percent. The growth level in Asia is estimated to be 5.9% percent in 2019 from 6.3% the previous year. This will be the first time that growth in Asia has dropped below 6.0% since the Asian Financial Crisis in 1997 and 1998.
The US estimate for growth for 2019 has been set at 2.5% while China has been reduced to 6.2%. The report went on to point out that Japan is seeing lackluster economic activity which exports being described as “especially weak.” The trade tensions increased recently when the White House placed tariffs on $200 billion of goods from China, increasing the tariff to 25% from the original 10%. Finally, this report sourced from Kyodo and the Japan Times, stated that the EU was expected to see growth at 1.2 percent in 2019.
The global economy is seeing a slowdown but the question is just how much will it slow in the coming months? Some are calling for a full blown recession in the US and China, so more on this topic in the coming weeks. Please see our videos on US-China Trade.