The investment house is now more optimistic for 2020, even though it recently downgraded growth forecasts for 2019.

Schroders, the investment management and private banking house operating in regions including Asia, says it is more upbeat on economic growth, even though it has cut its forecast for 2019.

The UK-listed firm's chief economist, Keith Wade, said that the firm has not extended its forecast downgrades for 2019 to 2020. In fact, he said it expects US-China tensions over tariffs and trade to calm down, that central banks will take a flexible position on monetary policy, and lower oil prices will stabilise economic activity.

"We have revised down our forecast for global GDP growth in 2019 to 2.8 per cent (from 2.9 per cent), but increased our projection for 2020 to 2.7 per cent (from 2.5 per cent). The downgrade for this year is driven by cuts to our forecasts for the eurozone, UK and Japan which offset a small increase to our China forecast. In 2020, the upward revision is across the board with, for example, the US upgraded to 1.6 per cent (previously 1.3 per cent), Japan to 0.4 per cent (previously 0 per cent) and China nudged up to 6.1 per cent from 6 per cent."

Wade said that the firm has also cut its forecasts on inflation for 2019 and 2020, largely driven by the fall in global oil prices.

"Weaker growth and lower inflation result in slightly easier monetary policy than in our previous forecast," Wade said.

"The US Fed funds rate is now only expected to rise once more before falling in 2020, whilst we have pushed out rate increases in the UK and eurozone with only one move from the European Central Bank and Bank of England now expected this year. We also expect the Bank of Japan (BoJ) to leave policy unchanged rather than tightening its yield curve control policy further. China is expected to ease further through a lower reserve requirement ratio (RRR) which is now expected to reach 10 per cent by end 2020 (previously 11 per cent)," he continued.

"Concerns over a recession will remain in the near term, but looking further ahead we have become more optimistic on growth as a result of three factors," he said. The factors are lower oil prices, prospects for a US accord with China on trade, and easier monetary policy.