Economic Forecasts from the World's Leading Economists

Global growth was likely steady in Q4, although 2019 begins with economic clouds on the horizon

The global economy is expected to have grown 3.1% in the fourth quarter over the same period in the previous year according to an estimate produced by FocusEconomics. If confirmed, this would be unchanged from Q3’s figure, but below the elevated readings recorded in H2 2017 and H1 2018.

Growth projected to regain some steam in Q4; crisis-stricken Venezuela groans under oil sanctions

Latin America’s bumpy economic recovery is expected to have had a better quarter at the end of 2018, after growth slumped in the third quarter. FocusEconomics estimates that GDP increased 1.7% year-on-year in Q4, above Q3’s 1.5%. Despite the modest uptick, growth remains weak in the Latin American economy, which had a disappointing 2018 overall. Weaker global trade, a noisy election cycle, shifting sentiment for emerging-market assets and one-off shocks in major players caused the recovery to flounder last year.

Regional economy likely performed well in Q4

FocusEconomics Consensus Forecast panelists expect the Central America and the Caribbean region to have expanded 4.0% in the fourth quarter, up from Q3’s 3.2% increase. Excluding Puerto Rico, CENAM is forecast to have grown 3.5%, which if confirmed would match Q3’s figure. 

Regional economy likely gained steam in the final quarter

Domestic demand buttresses growth in Q4 as external risks mount

The East and South Asia region closed 2018 on a relatively solid footing despite tighter financial conditions, trade tensions between China and the United States, equity-market turbulence and as the global tech cycle appears to be approaching its latter stages. The region benefited from solid domestic demand on the back of low unemployment rates, rising labor participation and wage gains. According to an estimate for the region produced by FocusEconomics, ESA countries grew an aggregated 6.0% year-on-year in the fourth quarter. The print matched both Q3’s expansion and last month’s estimate. Looking at the year as a whole, ESA economies expanded an aggregated 6.2% in 2018 (2017: +6.3%).

Recovery optimism replaced by recessionary fears

After a strong start to last year, the Eurozone’s economy appears to have lost significant momentum in the second half of 2018, with incoming data suggesting a sour end to the year. FocusEconomics analysts expect GDP to have expanded a seasonally-adjusted 0.3% quarter-on-quarter in the fourth quarter, a slight improvement from Q3’s 0.2% increase but notably below the 0.7% growth seen throughout 2017. The Eurozone’s economic momentum dissipated significantly throughout last year, weighed on by plunging confidence, dampened external demand and political turbulence.   

Q4 2018 slowdown now appears inevitable

Central and Eastern Europe’s (CEE) once-averted slowdown now almost certainly appears to have materialized in the fourth quarter of last year. On the heels of an expectations-defying outturn in the third quarter (Q3 2018: +4.2% year-on-year), and ahead of most year-end national accounts, FocusEconomics estimates regional growth to have cooled to 4.0% year-on-year in the fourth quarter. Available fourth-quarter indicators suggest that the moderating factors were twofold: On the external front, a slowdown in the Eurozone weighed on exports and, in turn, industrial output; meanwhile, domestically, tight labor markets appeared to no longer be delivering the returns they once did. Nevertheless, lower fuel costs are expected to have padded internal demand somewhat.

Regional economy likely hits headwinds in Q4

According to a preliminary estimate by FocusEconomics, South-Eastern Europe’s (SEE) economy slowed notably in the fourth quarter, with growth weakening to 1.1% in annual terms from 2.5% in the third quarter.

Activity improves in 2018 despite sanctions and EM turmoil

The economy of the Commonwealth of Independent States (CIS) gained momentum in 2018, despite a rollercoaster of a year for emerging-market economies. According to a preliminary estimate, regional GDP grew 2.6%, notably above 2017’s 2.0% increase. Recovering energy and mining sectors likely held up growth despite a volatile year for commodity prices. That said, multiple other headwinds were in play last year and prevented a stronger acceleration, including geopolitical uncertainty and sanctions on Russia, tighter global financial conditions and easing global trade. 

MENA losing momentum in Q4 as economic and political headwinds manifest

More complete economic data for the Middle East and North Africa for the second half of 2018 reveals that the region has started to feel the pinch of weaker global growth, volatility in financial markets and ongoing domestic threats. According to an estimate by FocusEconomics, the MENA economy expanded an aggregate 1.8% annually in Q3. The print was below both Q2’s 2.1% expansion and the 2.0% rise projected last month. That said, Iran represented the lion share of the slowdown in Q3 as the country was negatively affected by the reintroduction of economic sanctions by the United States.

Q3 2018 upturn strengthens on continued broad-based gains

Comprehensive third-quarter data revealed a strengthening recovery of the Sub-Saharan African (SSA) economy as the region’s heavyweights shook off a midyear malaise. Regional growth picked up to 3.1% year-on-year (Q2: +2.6% year-on-year), improving on earlier estimates (previously reported: +2.9% year-on-year). Aside from broad-based gains in Nigeria and South Africa—by far the region’s largest two economies—and an improved but still dire economic calamity in Angola, upbeat growth was recorded across Ghana, Kenya and a handful of other economies. Available data for the fourth quarter, meanwhile, suggests that upturns in Angola and South Africa might have been short-lived, with FocusEconomics projecting year-end regional growth of 2.8%.