“The global economic upswing that began around mid-2016 has become broader and stronger. …Advanced economies as a group will continue to expand above their potential growth rates this year and next before decelerating, while growth in emerging market and developing economies will rise before leveling off. For most countries, current favorable growth rates will not last.” (IMF, World Economic Outlook, April 2018)

From this writer’s perspective, the IMF’s assessment of the global economy makes a lot of sense. According to a recent IMF report, global real GDP advanced at a 3.7% rate of growth in 2017 and is expected to expand by a further 3.9% in 2018 and then in 2019.

The expectation of continued growth (2016 and 2019) in both the advanced and the emerging market economies, accompanied by improved commodity markets and a stronger expansion in world trade, is also very credible. Nevertheless, this relatively comforting global outlook requires that there are no major external shocks to the advanced economies. The “no shock assumption” may be hard to accept considering the American thrust towards protectionism.

In the case of the advanced economies, growth is being supported by monetary conditions that are still very easy, and fiscal measures which are generally expansive (particularly so in the United States).

Despite a volatile political environment in many important countries, consumer and business optimism continues to improve. As world trade speeds up, manufacturing production in the advanced economies is also increasing.

Of course, there continues to be serious legacy problems that haunt the world economy, including indebtedness concerns and trade protectionism, but nonetheless, the short term global economic outlook is still rather optimistic.  

                               Major World Economies At A Glance: 2017-2019

(Real GDP, Annual % Rates of Change)

                              1Yr.     Latest    2018 2019       

IMF, World Economic Outlook, April 2018