Economic Forecasts from the World's Leading Economists

Emerging market economies lead global economic growth in Q1

Economic growth was robust among developing economies in Q1 due to a combination of higher commodity prices, strong global growth and largely accommodative financial conditions. Advanced economies, however, appear to have hit a slowdown in Q1. A more complete GDP dataset showed that the global economy expanded 3.5% annually in Q1, matching last month’s estimate and coming in a notch above the 3.4% rise recorded in Q4 2017.

Headwinds mount in the second quarter, following a mixed performance at the start of the year

Preliminary estimates suggest the economy of Central America and the Caribbean remained largely in good shape at the outset of the year, with growth expected to have reached 2.1% annually in Q1. This marks a 0.6 percentage-point downward revision compared to last month’s estimate, largely driven by a larger expected contraction in Puerto Rico, one of the region’s largest economies in nominal GDP terms. However, excluding Puerto Rico, the region’s Q1 growth figure would have seen only a mild downward revision compared to last month’s forecast.

Economic momentum remains solid in Q2 after a positive Q1

Growth accelerates in Q1; trade war drums are beating louder

Economic growth in East and South Asia (ESA) was robust in Q1 on the back of largely accommodative monetary policies, strong global growth and bold fiscal support. A comprehensive GDP growth estimate for the region shows that ESA countries expanded an aggregated 6.4% annually in Q1, marking the fastest growth in over three years. The print was a notch above both Q4’s 6.3% increase and last month’s forecast of 6.3% growth.

Eurozone growth slides in Q1

Preliminary data revealed that the Eurozone economy lost momentum at the start of 2018, following a vigorous growth spell last year. GDP expanded a seasonally-adjusted 0.4% over the previous period in the first quarter, well below the fourth quarter’s 0.7% increase. The first-quarter result marked the slowest growth since Q3 2016. While the details behind the reading have not yet been released, the slowdown was likely driven by slower export growth due to a strong euro and a moderation in household spending amid lower confidence. In addition, several one-off factors such as the early timing of Easter likely also influenced the result. 

Growth slides at the start of 2018

Preliminary data revealed that the Central and Eastern European (CEE) economy lost steam in the first quarter of 2018, following a vigorous growth spell last year. Regional GDP expanded 4.5% annually in the first quarter, down from the fourth quarter’s robust 5.0% growth. Despite the slowdown, the first-quarter reading still marks a healthy growth rate for the CEE economy, which is benefiting from a solid domestic economy amid tight labor markets, robust investment and accommodative monetary policy. However, reduced impetus from the external sector, largely due to a slowdown in the Eurozone, tempered activity in Q1.

Economic growth ebbs in the first quarter but stays solid

South-Eastern Europe’s (SEE) economy is expected to have grown 4.6% in Q1, according to a more comprehensive estimate. This is below last month’s estimate of a 4.7% expansion, and comes on a significant slowdown in Romania, the region’s second-largest economy in nominal GDP terms. Q1’s growth was also down substantially from Q4’s 5.8%, driven by an expected loss of momentum in regional giant Turkey on slower credit growth and a weaker external sector.

Recovery picks up in the first quarter of 2018

Preliminary GDP figures for the economy of the Commonwealth of Independent States (CIS) reveal that the regional recovery bounced back at the start of 2018, regaining some of the momentum lost in the fourth quarter. Regional growth came in at 1.9% annually in Q1, picking up from Q4’s soft 1.5% expansion. Higher commodity prices, low inflation and a recovery in Russia’s economy are fuelling the region’s recovery.

Mounting geopolitical risks threaten MENA’s nascent economic recovery

The Middle East and North Africa’s (MENA) regional economy is gradually recovering from last year’s downturn. Oil-exporting economies are benefiting from the rise in oil prices, allowing some governments to boost spending and taking some pressure off financial markets. While higher oil prices are bad news for oil-importing economies, robust global economic dynamics are buttressing export growth, partially offsetting the deterioration of the current account. According to an estimate prepared by FocusEconomics, the MENA economy grew an aggregated 2.8% year-on-year in the January–March period (previously reported: +2.7% year-on-year), which would represent a noticeable improvement over the 1.0% rise in the October–December period of 2017.

Growth picks up at the start of 2018