Economic Forecasts from the World's Leading Economists

Global economy continues to fire on all cylinders, while trade war looms

The economic fundamentals that led global growth to post the strongest expansion in six years in 2017 remain firmly in place. A preliminary GDP dataset showed that the global economy expanded 3.5% annually in Q1, matching both last month’s estimate and the expansion recorded in Q3 and Q4 2017. A solid trade cycle, relatively accommodative financial conditions and resilient private consumption in the wake of historically low unemployment rates in most large economies, including Japan and the United States, were the main factors behind Q1’s robust growth rate.

Recovery hits soft patch in first quarter; financial volatility returns to the region  

Available data suggest that Latin America’s economy lost some steam at the start of 2018, as the region’s recovery continues to be bumpy. Regional GDP growth is expected to have come in at 1.7% annually in the first quarter, below the fourth quarter’s nearly four-year high of 2.0%. While regional growth has notably improved since a tough 2015–2016, economic slack and vulnerabilities still exist in many economies, which is keeping the recovery uneven overall.

Preliminary estimates suggest the economy of Central America and the Caribbean remained in good shape at the outset of the year, with growth expected to come in at 2.7% year-on-year in Q1, matching Q4’s figure. Data for the Dominican Republic shows that the economy expanded at a breakneck speed of 6.4% in the first quarter, supported by solid tourism growth and monetary easing since the middle of last year, which has shored up economic sentient and boosted credit growth.

Economic momentum continues unabated in Q1

A more comprehensive estimate of aggregate GDP growth in the Association of Southeast Asian Nations (ASEAN) shows that the regional economy expanded robustly in the first quarter, benefiting from solid domestic demand and accommodative monetary conditions. However, many countries’ external sectors appear to have softened in annual terms, due in part to tough prior year comparatives following a surge in exports last year. The region’s economy expanded 5.4% in Q1, up slightly from last month’s preliminary estimate of 5.3% and the prior quarter’s figure of 5.3%.

Growth remains robust in Q1 as trade war looms

The economy of East and South Asia (ESA) continued to fire on all cylinders in Q1 as low inflation allowed largely accommodative monetary policies in the region and strong global growth fueled demand for Asian goods. Moreover, governments in the region appear to be more supportive of growth this year, while improved weather conditions boosted food supply, particularly in South Asia. A preliminary estimate that accounts for over four-fifths of the region’s nominal GDP shows that ESA countries expanded an aggregated 6.3% annually in Q1, matching both Q4’s print and last month’s forecast.

Euro Area: Downbeat data suggests soft start to 2018 

A string of weaker economic data suggests that the Eurozone economy decelerated at the start of 2018, following a robust spell of growth last year. While GDP data for the first quarter is still outstanding, monthly indicators have been soft, with economic sentiment falling throughout the quarter, and industrial production dropping in January and February. That said, the tailwinds of last year’s solid growth remain largely in place, and the slowdown is likely to be moderate thanks to a tightening labor market and ultra-accommodative monetary policy. FocusEconomics analysts expect GDP to have expanded a seasonally-adjusted 0.5% over the previous quarter in Q1, down from Q4’s 0.7% expansion.

Economy loses steam in Q1 after stellar 2017

Recent data suggests that the Central and Eastern European (CEE) economy lost some momentum at the start of 2018, following the best performance in a decade last year. The Consensus Forecast is for regional GDP to have expanded 4.4% annually in Q1, below Q4’s 5.0% increase. Despite the anticipated slowdown, the estimate still marks a robust reading for the CEE economy, which is benefiting from several tailwinds including tight labor markets, soaring investment and accommodative monetary policy.

Economic growth likely continued to ease in first quarter but remained robust

South-Eastern Europe’s (SEE) economy is expected to have grown 4.7% in Q1, down from Q4’s impressive 5.8% expansion, which had marked the second fastest rate in nearly a decade. Although hard GDP data is still outstanding for virtually all the countries in the region, a loss of momentum in Turkey likely drove the slowdown. The Turkish economy appears to have lost steam on tighter credit conditions—as Turkish banks were unable to maintain last year’s blistering pace of credit growth—and elevated inflation dampening purchasing power. This comes after fiscal stimulus caused growth to come in markedly above potential last year. However, the regional giant’s pace of growth remained robust, with business confidence still firmly in positive territory throughout the quarter and industrial production solid in January and February.

Economy gathers steam at start of 2018, but political worries intensify

MENA: Political instability threatens to dash gains from the recent oil price rally 

The Middle East and North Africa (MENA) regional economy appears to have gained steam at the outset of this year, mainly due to higher oil prices, strong external demand and stabilization policies and reforms in some countries. According to an estimate prepared by FocusEconomics, the MENA economy expanded an aggregated 2.7% year-on-year in the January–March period, which would represent a sharp improvement over the 1.0% rise in the October–December period of 2017 (previously reported: +1.2% year-on-year).

Revised data for Angola sours SSA’s 2017 performance

A more comprehensive set of data revealed that Sub-Saharan Africa’s (SSA) economy ended 2017 on a weaker note than previously expected. Regional GDP increased 2.7% year-on-year in the final quarter of last year, below last month’s preliminary estimate of a 3.0% expansion. In addition, the region’s third-quarter performance was revised down from the 3.0% increase estimated last month to a more subdued 2.4% expansion. The large downward revisions were mainly due to the inclusion of new quarterly national accounts data for Angola, which released quarterly figures for the first time in May.