Before the outbreak of the Covid-19 pandemic in late 2019, global economic growth had already been on a downward trend, slowing from a peak of 3.8% in 2017 to 3.0% in 2019 – weighed down by rising trade tensions between the US and China, and the lagged effect of the US Federal Reserve’s (US Fed) policy tightening in 2017-18.

The slowing growth prompted the US Fed to start cutting its key policy rate in July 2019, while the European Central Bank (ECB) decided to embark on a small quantitative easing (QE) programme in November last year.

Back then, RHB Group Research believed that the monetary policy easing should have enabled the global economic cycle to be extended, perhaps, for another two years, even though it was already close to the tail end of the cycle.

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