Speaking at the SteelOrbis 2018 Spring Conference & 78th IREPAS Meeting held in Warsaw on May 6-8, Marek Rozkrut, partner at Ernst & Young Poland, said that in the 2018-19 period the world economy is projected to grow by 3.9 percent annually, compared to 3.8 percent in 2017 and 3.2 percent in 2016. According to Mr. Rozkrut, the global economy is enjoying a synchronized expansion, with the euro area, Japan, China and the US growing beyond expectation in 2017.
However, he indicated that the world economy has still not returned to the pre-crisis high growth path, mainly due to the ageing population, falling rates of labor force participation, and the lower-than-expected productivity growth. The Ernst & Young official pointed out that in the 2008-17 period economic growth was very uneven, with China being a top performer, while in the 2018-22 period more balanced economic growth is expected across countries.
He went on to say that over the last decade the ease with which business is done in the US and China has not changed a lot, while more significant changes have been recorded in individual EU countries. Doing business is harder in the EU countries than in the US but easier than in China. He also underlined that the share of the main sectors which consume steel products in terms of total value-added is diminishing in major economies.
Commenting on protectionism and trade tensions, Mr. Rozkrut said that a major risk factor is the potential escalation of protectionism and trade tensions, explaining that, while many EU countries have limited direct trade flows with China or the US, their indirect exposure to trade disruption in major economies (e.g., through trade with Germany) is much more significant.