Pacific Investment Management Co. (PIMCO) is forecasting that U.S. economic growth will slow in the first half of this year
The downward forecast comes even as the likelihood of a full-blown global recession diminishes and trade tensions between the U.S. and China ease.
"Just as the U.S. cycle lagged behind the global cycle during 2018 and 2019 with the U.S. economy slowing later and by less than the rest of the world, we expect global growth to trough out and rebound earlier than U.S. growth this year," said PIMCO in its forecast report.
The bond giant warned in December 2018 that there was a 30% recession probability over the coming 12 months. The latest report doesn’t include a similar number but warns that when a recession hits, it may be worse because central bank easing has left “less monetary policy space available for future action.”
Other highlights in the PIMCO outlook, based on a December forum at the firm’s Newport Beach, California headquarters, include U.S. gross domestic product (GDP) growth will slow to 1.5% to 2% in 2020, from about 2.3% in 2019; GDP growth outside the U.S. will reach 0.75% to 1.25% in both the Euro zone and the U.K., and 5% to 6% in China.
