The global economy performed well again in 2018 after the strength seen in 2017. However, as the year progressed the recovery became less synchronized, with growth in the US strengthening further while falling away in most other countries, as the strong US dollar and rising trade tensions undermined activity in some economies.



Mercer’s Global Outlook for 2019 Shares Insights on:

  1. Drivers of the global economy
  2. Views on monetary policy and impacts on financial markets
  3. Assessments on equity, bond and currency valuations 


Rupert Watson, Head of Asset Allocation
Penny Aitken, Asset Allocation Specialist 







  • Growth projected to weaken slightly 
  • Resolution of key trade tensions could boost growth 
  • Consumer spending likely supported by improving labor markets, rising wages, still-elevated confidence levels
  • Business confidence should support capital expenditures
  • Further monetary policy normalization should continue 


  • Growth at reasonable levels — robust global aggregate demand, strong European consumer 
  • High political risk (uncertainty around Brexit, Germany and Italy) 
  • ECB likely to stop purchasing bonds (2018); potentially hike rates late in 2019 

 Emerging Markets

  • Growth likely subdued (but some pickup expected in 2020) 
  • Powerhouse China slowing — government striving to contain shadow banking sector, ease financial imbalances; other emerging markets doing better


  • Economic growth to slow modestly after a very strong 2018 
  • Impact of the tax cuts likely to fade 
  • Consumer/business spending should continue to support the economy
  • Short-term inflationary pressures may offset long-term deflationary forces of globalization, technology
  • “Fed” likely to raise interest rates 3x–4x and further reduce balance sheet


  • An uptick in capital expenditures which may boost growth
  • Robust labor market (unemployment at 25-year low)
  • Growth in 2019/early 2020 at risk due to VAT increase from 8% to 10%
  • Bank of Japan’s accommodative monetary policy likely to continue 



The ideas outlined in this paper represent our observations on the challenges, opportunities and drivers of change present in the current investment environment. We provide these ideas with the aim of provoking discussion, but the appropriate response at an investor level will be heavily influenced by the specific beliefs, objectives and constraints of each investor. We look forward to helping investors adapt their strategies as new risks and opportunities arise over the course of 2019.


Learn More About Mercer’s Investment Research


Download the research report

Fill out your details below to receive the Research Report in your inbox.  If you do not have your pop-up blocker enabled, you will be prompted by your browser to download the white paper or view in a new window.

*Required Fields