Global economic growth in 2018 forecast to be strongest since 2011

The global economy is set to grow by almost 4% in 2018 in purchasing power parity (PPP) terms, adding an extra $5 trillion to global output at current values, according to new projections in PwC’s latest Global Economy Watch.

Ireland is expected to be the fastest-growing Eurozone economy in 2018, well ahead of France and Germany. Ireland’s economy is also forecast to grow around two-and-a-half times faster than the UK.

The main engines of the global economy - the US, emerging Asia and the Eurozone - are expected to contribute almost 70% of this global economic growth in 2018, well ahead of their post-2000 annual average of around 60%.

Growth in the Eurozone is predicted to be above 2% in 2018, as PwC expects the peripheral economies (Greece, Spain, Portugal and Ireland) to outpace the core economies (Germany, France, Italy and Netherlands) for the fifth consecutive year. 

Ireland is expected to be the fastest growing of the core and peripheral economies with PwC forecasting that the Republic’s economy will grow by around 3.5% in 2018.

Of the larger Eurozone economies, the Netherlands is expected to lead the way with economic growth at 2.5%. By contrast, uncertainty relating to Brexit is expected to drag on UK growth, which is predicted to be 1.4% in 2018.

 

Barret Kupelian, senior economist at PwC, said:

 

“We expect global economic growth to be broadly based in 2018, rather than dependent on a few star performers.

 

“While the growth outlook for 2018 is positive, there are some downside risks for business to bear in mind, including the progress of the Brexit negotiations and wider discussions about the future of the EU.”

 

Other PwC Global Economy Watch projections for 2018 include:

  • The European Central Bank could further reduce its monthly asset purchases in 2018, but a dramatic shift in monetary policy in Japan is unlikely.
  • Almost 600 quadrillion (that’s 600 with 16 zeros) British Thermal Units of energy could be consumed by the global economy in 2018, the highest level on record and double that of 1980.
  • In 2018 the aggregate G7 unemployment rate is on course to hit a 40 year low of below 5%.
  • Oil prices are set to remain broadly stable in real terms, with OPEC and its allies extending its 1.8 million barrels per day supply cut until the end of next year.
  • China, the world’s largest economy, could grow by 6-7% in 2018, slowing down in line with expectation.
  • An extra 80 million people are likely to be added to the world’s population in 2018, but as a percentage increase this would be the slowest since 1950. For every 10 people added to the world’s population, PwC predicts 9 will be located in either Africa or Asia. 

 

Ends.

Notes for editors.

The full report is available to download below.


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