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Global Economic Prospects

The economic outlook for East Asia and the Pacific in six charts: Strong growth, easing moderately

Ekaterine T. Vashakmadze's picture
Growth in the EAP region strengthened marginally to 6.4 percent in 2017, 0.2 percentage point higher than expected. The region continued to be a major driver of global growth, accounting for more than a third of it in 2017, mostly because of China’s significant contribution. Regional growth is projected to gradually slow to 6.2 percent on average in 2018-20. That is broadly in line with previous forecasts, with the structural slowdown in China outweighing a modest further cyclical pickup in the rest of the region.

Relatively stable: The outlook for growth in emerging and developing Europe and Central Asia in five charts

Yoki Okawa's picture
Growth in the emerging and developing Europe and Central Asia region is estimated to have reached 3.8 percent in 2017, the strongest performance since 2011, helped by stabilizing commodity prices and strong demand from the Euro Zone. In addition, economies of the region rebounded from country-specific shocks in 2016. Growth is expected to moderate in 2018 to 2.9 percent.

Gathering momentum: Growth prospects in Latin America and the Caribbean in five charts

Dana Vorisek's picture
A cyclical growth recovery in Latin America and the Caribbean began in 2017. The upturn in regional growth, from -1.5 percent in 2016 to 0.9 percent in 2017, reflects broadly improving conditions in Brazil, which emerged from a deep, two-year-long recession in the first half of the year, and in Argentina, where growth rebounded after contracting in 2016. The outlook for accelerating regional growth is supported by strengthening private consumption and investment, particularly in commodity exporting countries. Domestic demand is expected to respond favorably to strengthening confidence, relatively low inflation, and global financing conditions that, while somewhat tighter, are still supportive.

Real activity indicators in Brazil improved markedly in 2017 

Brazil’s recovery is expected to solidify in 2018. The economy is anticipated to grow 2 percent as improving labor conditions and low inflation support private consumption, and as policy conditions become more supportive of investment.
Industrial Production and Retail Trade, Brazil
Sources: Haver Analytics, World Bank.
Notes: Lines show 3-month moving averages using non-seasonally-adjusted data. Last observation is October 2017.

The Middle East and North Africa outlook in five charts: Recovery after a weak 2017

Lei Sandy Ye's picture
Also available in: Français | العربية
Growth in the Middle East and North Africa region is estimated to have slowed sharply in 2017 and is forecast to recover to 3 percent in 2018. Regional activity is anticipated to strengthen gradually over the medium term in response to policy reforms and easing fiscal adjustments. A number of downside risks continue to cloud the outlook for the region, including geopolitical tensions and conflict, weakness in oil prices, and obstacles to reform progress. These are only partly offset by the possibility of stronger-than-expected Euro Area activity.
Regional growth tumbled last year, led by oil exporters

Growth in the Middle East and North Africa is estimated to have slowed sharply to 1.8 percent in 2017 from 5 percent the year before, driven by decline in growth among oil exporters. Growth declined among Gulf Cooperation Council and non-GCC oil exporters, with oil production cuts and continued geopolitical tensions contributing to the fall-off.

What keeps the President of the World Bank up at night?

Jim Yong Kim's picture
Residents of Kashadaha village visit the Kashadaha Anando school in Kashadaha village, Bangladesh. © Dominic Chavez/World Bank
Residents of Kashadaha village visit the Kashadaha Anando school in Kashadaha village, Bangladesh. © Dominic Chavez/World Bank

This year’s World Economic Forum Annual Meeting comes at a time of good news for the world economy. As we said in this month’s Global Economic Prospects report, for the first time since the financial crisis, the World Bank is forecasting that the global economy will be operating at or near full capacity. We anticipate growth in advanced economies to moderate slightly, but growth in emerging markets and developing countries should strengthen to 4.5% this year.

The outlook for growth in South Asia in five charts: Robust prospects

Temel Taskin's picture
South Asia’s growth prospects appear robust, with household consumption expected to remain strong, exports expected to recover, and investment projected to revive with the support of policy reforms and infrastructure improvements.

Growth to pick up in region

Growth in the region was an estimated 6.5 percent in 2017. It is forecast to pick up to 6.9 percent in 2018 and stabilize around 7 percent over the medium term. The forecast assumes strengthening external demand as the recovery firms in advanced economies, and supportive global financing conditions. Monetary policy is expected to remain accommodative as modest fiscal consolidation proceeds in some countries.

Sources: Haver Analytics, World Bank.
Note: Shaded area indicates forecasts.

Why the global economy could be turning a significant corner, in six charts

Ayhan Kose's picture

2018 will likely mark a turning point for the global economy. For the first time since 2008, the negative global output gap – defined as the difference between the levels of actual output and output if operating at full capacity – is expected to close. As the output gap closes in advanced economies, central banks are likely to normalize monetary policy after a decade of exceptional easing. With this anticipated withdrawal of stimulus by advanced economies, emerging market and developing economy policymakers need to remain alert to the potential for adverse spillovers.

Output gaps are closing

In 2018, for the first time since 2008, the negative global output gap is expected to be closed.

Global output gap
Source: World Bank staff estimates.
Notes: Output gaps calculated using multivariate filter. Global, regional, and group output gaps are calculated using constant 2010 U.S. dollar GDP as weights. The sample includes 15 advanced economies (Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, New Zealand, Norway, Spain, Sweden, Switzerland, United Kingdom, and United States) and 23 EMDEs (Argentina, Bolivia, Brazil, Bulgaria, Chile, China, Colombia, Croatia, Hungary, India, Indonesia, Kazakhstan, Malaysia, Mexico, Peru, Poland, Romania, Russia, Serbia, South Africa, Thailand, Turkey, and Vietnam). 2018 GDP is forecast. Dashed lines are 95 percent confidence interval bounds computed from the Kalman smoother state variances. Global lower and upper bounds are obtained as GDP-weighted averages of individual country lower and upper bounds.

Building solid foundations: How to promote potential growth, in six charts

Franziska Ohnsorge's picture

Download the January 2018 Global Economic Prospects report.

Despite an acceleration of global economic activity, potential output growth (the growth that can be sustained at full employment and capacity) has slowed. The slowdown reflected weak investment growth, slowing productivity growth, and demographic trends. These forces will continue, and, unless countered, will depress global potential growth further over the next ten years. 

Global Potential Growth Is Below its Long-term Average. Global potential growth slowed in 2013-17 below its longer-term average, whether globally, among advanced economies (AEs) or among emerging market and developing economies (EMDEs).
Sources: World Bank estimates; Haver Analytics; Penn World Tables; World Development Indicators, World Bank. 
Notes: A.  Based on production function approach, GDP-weighted averages for a sample of 30 advanced economies and 50 EMDEs. 

Why 2018 global growth will be strong, and why there is still cause for concern, in 10 charts

Carlos Arteta's picture
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Download the January 2018 Global Economic Prospects report.

Global growth accelerated to 3 percent in 2017, supported by a broad-based cyclical recovery encompassing more than half of the world’s economies, and is expected to edge up to 3.1 percent in 2018. Global trade regained significant momentum, supported by an upturn in investment.

As headwinds ease for commodity exporters, growth across emerging and developing economies is expected to pick up. However, risks to the outlook remain titled to the downside, such as the possibility of disorderly financial market adjustment or rising geopolitical tensions.

A major concern in the subdued pace of potential growth across emerging market and developing economies, which is expected to further decline in the next decade. Structural reforms will be essential to stem this decline, and counter the negative effects of any future crisis that could materialize.

The broad-based recovery should continue

Global growth accelerated markedly in 2017, supported by a broad-based recovery across advanced economies and emerging market and developing economies (EMDEs), and it is expected to edge up in 2018.