In 2017, the global economy enjoyed a synchronized growth that was driven by a rebound in global trade and increased investments as business and consumer confidence improved. Global trade rebounded to a 6-year high last year while investment was invigorated to a 5-year peak. Trudging into the half year 2018, global growth has eased but the outlook remains robust amid heightened downside risks.
According to the World Bank’s mid-year revised projections for 2018, 45.0% of countries are expected to experience further acceleration compared to 56.0% in 2017. Furthermore, growth in advanced economies is expected to moderate slightly to 2.2% in 2018 (from 2.3% in 2017), as fiscal stimulus in the United States offsets lags in other regions. Meanwhile, growth in the commodity-exporting emerging market and developing economies is expected to strengthen amid continued recovery as commodity prices firm.
Half-way into 2018, the more obvious risks that could cap the accelerated growth witnessed last year hover around the impact of trade protectionism and rising rates on developing economies. As at Q1-18, we noticed some tapering in global manufacturing output (PMI) and export orders. That said, per The World Bank, global growth is expected to remain flattish at 3.1% in 2018 and moderate in the next two years to 2.9% by 2020.
