Outlook 2018: Global GDP growth of 3.8% in 2018
We expect the global growth momentum to continue in 2018; in fact, global GDP
growth will probably even accelerate slightly, to 3.8%. In the US, the upcoming
tax reform should boost investment in particular and help to drive GDP growth
up to 2.6%, despite the expected four Fed hikes. Despite the likely slowdown in
China, to a growth rate of 6.3%, the recovery in the emerging markets looks set
to continue.
Growth momentum in the euro area appears to have peaked, as
free capacities are becoming scarce; the output gap in the euro area should be
almost closed by now. By the final quarter of 2018, annualised GDP growth will
probably have weakened to 1.6%; however, this rate is still above potential. The
growth acceleration during 2017 will lead to a growth overhang of almost 1 pp at
the beginning of 2018. While the average rate for 2018 will therefore still come
in at 2.3%, despite the forecast slowdown in the course of the year, it is likely to
decline more significantly in 2019, to 1.7%.
EU Forecast
euf:ba18h:92/nws-01