Economic growth in the U.S. is expected to slow further in the near term before staging a rebound in the second half of 2020, though full-year expansion is still likely to lag the global economy, Pacific Investment Management Co. LLC said in a report.
The U.S. economy is forecast to grow 1.5% to 2.0% in 2020 following an estimated expansion rate of 2.3% in 2019. The deceleration is expected to be more pronounced in the first half, with GDP growth seen slowing to about 1% during this period before picking up later this year, according to the report.
The expected weakness in the near term comes amid the "lagged effects" of global growth moderation, elevated business uncertainty and lower corporate profit growth on investment and hiring, the report said. Easing financial conditions and the potential signing of a U.S.-China partial trade deal are likely to "counteract the slowdown" this year, the report added.
Meanwhile, the world economy is projected to expand 2.25% to 2.75% this year following an expected 2.7% growth rate in 2019.
Growth in the euro area in 2020 is anticipated at a range of 0.75% to 1.25% after coming in at 1.2% last year, with an expected rebound in Germany.
U.K. economic growth is likely to be "modestly below trend" at 0.75% to 1.25%, down from a projected expansion rate of 1.3% in 2019. PIMCO said uncertainties surrounding the U.K.'s post-Brexit trade ties with the EU are likely to continue to weigh on business sentiment, while noting that the risk of ending the transition period without a deal is low.
Elsewhere, China's economic growth is seen decelerating to a range of 5.0% to 6.0% from an expected 6.1% expansion last year.
The asset management company warned that while recent easing measures by world central banks have helped stimulate the economy, policymakers are likely to have less capacity to act in case the next downturn comes.