Economic outlook

Early January 2020, economic forecasts predicted that economic growth will pick up in 2020 and 2021 with global growth of around 4-5%^[1] in developing and emerging markets. The world around us, however, remains uncertain. The COVID-19 (Coronavirus) outbreak in the first quarter of 2020 is a major risk to the global economy and financial markets. In two months’ time the number of affected cases has increased rapidly and the virus has spread across the globe. In March 2020, The World Health Organization formally recognized it as a pandemic. In response, an increasing number of countries have imposed lock-downs on complete countries and/or regions and have taken national measures to contain and slow down further spreading of the virus. Collectively, these measures will dampen economic activity and growth. At this point in time, the impact this will have on the global economy, financial markets and FMO’s operations is highly uncertain and difficult to assess, as it depends on the level to which the virus will further spread, its duration and growth rate. We expect this will impact FMO’s overall performance. The degree of impact remains, however, uncertain. In 2020, we will continue to monitor these and other developments.

The various Brexit scenarios have been on our radar since early 2018 and we continue to follow developments until Brexit has formally taken place. We expect the financial impact on FMO to be insignificant. Once exit agreements have been reached and details are available, certain FMO products, transactions and processes will need to be made Brexit-proof, which can be realized within a short time frame.

• 1 IMF update World Economic Outlook January 2020