Rapid growth in global economy expected in 2018

24/01/2018.

As momentum builds in developed countries and inflation revives, growth in the global economy is expected to reach 3.7% this year, the highest rate since 4.4% was recorded in 2010, according to Reuters polls taken this month of more than 500 economists covering more than 45 countries.

Nearly 70% of over 140 correspondents who answered an extra question also said the global economy was more likely to gather momentum this year and push inflation higher than currently predicted.

The 3.7% increase is 0.1% higher than the 3.6% predicted in Reuter’s October polls, but lower than the International Monetary Fund’s prediction this month of 3.9% growth.

The optimistic predictions were driven mainly by growth in developed economies, particularly the euro zone and the United States.

The US economy was predicted to grow this year at its fastest rate for 3 years, fuelled by the biggest tax overhaul since the 1980s.

Surging businesses and consumer confidence, together with steady job creation, have left economists repeatedly raising growth estimates for the euro zone and its major economies.

The rising euro poses a threat, however, and could challenge the European Central Bank as it moves to end its money printing at the end of the year.

In Britain, above target inflation and a buoyant job market won’t push the Bank of England to tighten policy until at least November as Brexit negotiations with the EU develop.

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