In light of the ongoing trade dispute between the USA and China, the global economy remained subdued in the first half of 2019. While economic activity in the advanced economies proved surprisingly firm following a weak second half of 2018, the growth dynamic in emerging markets remained below expectations for the first half of 2019. Global trade also reflected the tensions on the markets: according to estimates of the International Monetary Fund (IMF), global trade growth in the first quarter of 2019 was around 0.5 percentage points slower than in the same period last year. This weaker growth was particularly evident in the emerging Asian markets.
The Chinese economy slowed slightly in the second quarter but remained steady with a overall growth of 6.3 % for the first half-year. In Russia, the pace of economic recovery slowed slightly during the first six months. After a weak March, economic growth started to pick up again in April. World Bank estimates put Russia’s gross domestic product (GDP) growth at around 0.5 % for the first quarter of 2019.
Following a weak second half to 2018, economic indicators for the eurozone point to a recovery for the first half of 2019, but this will continue to be tempered by Brexit uncertainties. According to Eurostat, economic activity in the first quarter is estimated to have grown by 1.2 %. Outside of the eurozone, the Central and Eastern European markets, most notably Romania and Hungary, displayed highly dynamic growth of 5.1 % and 5.2 %, respectively, in the first quarter of 2019. In Poland, growth tailed off slightly as compared with 2018, but GDP still increased by 4.7 % in the first three months of 2019. Economic output in the Czech Republic consolidated at a stable 2.6 % in the first quarter of 2019.
Weighed down by fears that the current trade disputes might affect German exports, economic growth began to slow in Germany over the course of the year. In the first quarter of 2019, German GDP rose by just 0.4 %. According to the Kiel Institute for the World Economy (IfW), there are signs that GDP may even decrease in the second quarter.
Despite this difficult environment, growth in German foreign trade remained stable. In the period between January and May 2019, export growth of 2.4 % was slightly below the prior-year level. Imports, however, significantly improved on the same period last year with growth of 4.5 %.