The European Central Bank warned Thursday (Dec. 27) that the economy on a global basis is headed for a slowdown next year.
Reuters, citing the European Central Bank’s regular economic bulletin, reported the European Central Bank said the global economy will stabilize after a slowdown in 2019. According to the report, investors have been expecting a slowdown in economic growth across the globe as the cost to borrow rises and the U.S. and China remain embroiled in a trade war. While the ECB backed that assumption it did note that it still sees “inflationary pressures” around the globe and in the Euro Zone.
“Looking ahead, global economic activity is expected to decelerate in 2019 and remain steady thereafter,” the ECB said, reported Reuters. “Global inflationary pressures are expected to rise slowly as spare capacity diminishes.” The ECB noted that underlying inflation is forecast to increase on a gradual basis over the medium term, supported by its monetary policy measures, continued economic expansion and increasing wage growth.
At the same time that the European Central Bank is warning of a slowing global economy, small businesses in the U.S. are expressing concern about their own growth prospects. With the stock market taking a bloodbath in recent sessions and the ongoing trade war with China, small businesses are in cost-cutting mode and are changing their hiring plans for 2019, reported the Associated Press in a recent report. That comes even with consumer spending and the U.S. economy still showing signs of strength. Instead of hiring more workers, small business owners have now shifted their focus to finding new customers and clients.
In addition to concerns over the stock market, small and medium-sized businesses are being negatively impacted by the partial government shutdown. About 30 million small businesses will likely be harmed by the stalemate in Washington, D.C.