Economic Forecasts from the World's Leading Economists

Mounting headwinds will weigh on global growth further down the road

Global economic growth appears to be losing some steam in Q3 following Q2’s strong result. A strengthening U.S. dollar and higher borrowing costs are unnerving financial markets in developing economies, while rising trade protectionism is starting to weigh on business sentiment. Moreover, economic dynamics are softening in China and the Eurozone. On the flip side, the U.S. economy continues to fire on all cylinders, while Japan is holding up relatively well due to strong investment. A GDP growth estimate for the global economy projects year-on-year growth at 3.3% for Q3. While the print was a notch below the result from the previous period, it matched last month’s forecast.

Argentina dents regional recovery in Q2

A more complete picture of the region revealed that Latin America’s recovery lost steam in the second quarter of the year and performed  more poorly than expected. Regional GDP growth (excluding Venezuela) waned from 2.0% year-on-year in Q1 to 1.7% in Q2, the worst result in one year. While firmer commodity prices, improving household spending and recovering sentiment supported growth in several economies, shocks in major-players Argentina and Brazil held back regional activity.

Regional economy gains steam in the second quarter

A comprehensive set of data shows that the economy of Central America and the Caribbean strengthened in the second quarter of the year, with growth rising to 2.2% from 2.0% in Q1. Excluding Puerto Rico—which is still mired in a recession intensified by the damage caused by last year’s hurricanes—regional GDP growth reached 3.7% in the second quarter, up from 3.5% in Q1.

Economy likely still growing robustly in the third quarter

According to FocusEconomics forecasts, ASEAN is set to expand a healthy 4.9% in Q3 2018, buttressed by strong domestic demand. However, this will still mark a loss of momentum from the second quarter’s 5.2% expansion, largely on sizeable slowdowns in Singapore and Thailand.

Trade tensions and financial volatility threaten to undermine ESA’s economic growth

 Complete data confirms soft H1; political headwinds pick up after summer lull

Comprehensive data confirmed that growth within the Eurozone was stable in quarter-on-quarter terms throughout the first half of the year, expanding a seasonally-adjusted 0.4% in both the first and second quarters. Although the readings pointed to solid economic fundamentals, these numbers are soft compared with last year’s robust outturn. Internal dynamics across the common-currency bloc were uneven in the second quarter: Consumer spending was bruised by higher inflation and deteriorating economic sentiment, while fixed investment recorded a marked improvement as firms took advantage of easy credit conditions. Meanwhile, despite a small rebound in export growth, the external sector continued to drag on the economy as concerns over U.S.-initiated tariff-sparring bruised global trade. Looking ahead, analysts also expect third-quarter growth to be unchanged at 0.4%. Available data has been notably weak in recent months and suggest another challenging quarter for consumers and export-oriented firms alike.

CEE economy notches solid Q2 outturn, but growth continues to taper

Complete data confirmed that internal demand was firmly in the driver’s seat of the Central and Eastern European (CEE) economy in the second quarter. According to a comprehensive estimate by FocusEconomics, regional growth came in at 4.2% year-on-year in the second quarter, matching the preliminary estimate although down a couple notches from the 4.4% outturn at the outset of the year. Low unemployment, cheap borrowing costs and strong absorption of EU structural funding have fueled robust demand at home. Nevertheless, growth has waned considerably since last year amid a slowdown in the Eurozone—the region’s major trading partner—and the broader pullback in global trade. Moreover, in line with this year’s cool-off, available third-quarter data suggests regional growth continued moderating into the second half of the year due to the further ebbing of European demand and the onset of Turkey’s economic crisis, both of which are likely to have bruised exports in the quarter.

Growth slows notably in the second quarter, Q3 likely to be weaker still

According to a comprehensive estimate by FocusEconomics, South-Eastern Europe’s (SEE) economy lost steam in the second quarter and grew 4.2%, down notably from Q1’s 5.4% expansion but above last month’s preliminary estimate of 4.0%. The slowdown was driven chiefly by a moderation in growth in regional powerhouse Turkey, which accounts for around half of the region’s GDP.

Recovery firms in Q2 but currencies come under pressure in Q3

Higher oil prices and increased production are supporting economic growth

Recession in South Africa hits growth in H1

Available data suggests that Sub-Saharan Africa’s (SSA) economy kept pace in the second quarter as growth in the region continued firming in the aftermath of the commodity price-driven slump. That said, regional growth through the first half of the year was downgraded significantly this month as metrics for a number of the heavyweight economies fell short. Regional GDP is projected to have grown 2.8% in the second quarter, in line with the first quarter’s expansion—although growth in the first half of the year was down a notch from the fourth quarter last year. Still solid by most measures, the second-quarter outturn appears to have been bolstered by the supportive external environment, in large part thanks to robust global demand for key commodities. Growth dynamics were, however, far from uniform across the region as the two largest economies confronted challenging scenarios.