FGV Annual Report 2018

12 ESTABLISHED INTEGRATED AND COMPREHENSIVE IMPLEMENTATION PLANS FGV HOLDINGS BERHAD OUR MARKET LANDSCAPE 2018 OVERVIEW Global economic growth is forecasted to settle at 3.60% in 2018, a slight dip from 3.70% a year earlier. This is still considered a good year with real Gross Domestic Product (GDP) registering stronger-than-expected growth. The US, India and Brazil demonstrated strong growth whilst China and emerging markets remained robust. Nonetheless, global expansion has demonstrated underlying easing due to slower trade, tighter global financial conditions and higher crude oil prices. The declining trend since 2017 is expected to continue in 2019, forecasted at 3.50% due to slower growth in the USA and China. The downside will be limited by promising growth in most of the emerging markets and developing countries. Despite some potential signs of relief seen towards the end of 2018, the period of robust growth is probably behind us as the positive trends will not be enough to shift the gloom over the global outlook. 2019 MACROECONOMIC OUTLOOK USA China India ASEAN Malaysia Although growth has peaked, the outlook for 2019 remains robust. Growth is expected to moderate to 3.50% in 2019, led by deceleration in the US and further softening in China, supported by stable growth in most emerging markets and developing countries. In the near-term, policy support and strong job growth continue to underpin domestic demand. EU Real GDP Growth (%) 2019 outlook to expand moderately due to: • High public debt level in some member states, while the Eurozone’s factious politics could be a source of financial volatility • A no-deal Brexit poses a significant risk • Consumption growth has been relatively slow • Lower domestic demand and exports USA economy to grow at slower pace due to: • Rising trade barriers weighing on business sentiment • Higher interest rates to affect consumer spending China’s economy to continue to slow gradually as a result of: • Easing monetary and fiscal policy • Uncertainty around the extent of US-China trade tensions Sound growth in 2019 due to: • Firm private consumption, investment and export • Worker and geographical advantage for Vietnam, Cambodia and Myanmar Resilient outlook in 2019: • Supported by domestic demand • Growth to be anchored by private sector expenditure, in particular household spending, on the back on lower public spending Stable growth outlook from steady domestic consumption and higher investment Source: EIU, World Bank, OECD, Ministry of Finance, Euromonitor, IMF, Goldman Sachs Research 2019 2.0 1.8 2018 2019 6.6 6.3 2018 2019 7.6 7.7 2018 2019 4.4 4.3 2018 2019 4.7 4.6 2018 2.3 2.9 2018 2019