Friday, December 29, 2017

Looking back - The 2018 crystal ball - From Chief Economist Intelligence Unit

Reproduced from email I've received from Simon Baptist
Chief Economist Intelligence Unit

Everyone loves a good list, so I thought I'd finish off 2017 with some of our key calls for 2018. It should be another pretty good year for the global economy: our forecast is for global GDP growth to dip just slightly from 2.9% this year to 2.8% next year. The biggest slowdown will be in China and those economies tied closely to it, while the biggest acceleration will be in Latin America. Tiny countries aside, India is our pick for the fastest-growing economy, followed by Ethiopia and Cambodia. China will sit at around 15th place. At the other end of the spectrum, Venezuela's GDP will yet again shrink by more than 10%, with Puerto Rico, Equatorial Guinea and North Korea also in negative territory. India, Iran and Vietnam will see the fastest productivity growth, a good sign of longer-term success.

For those following the financial markets, we expect another year of US dollar strength, with only 27 of the currencies we forecast appreciating against it, 37 remaining flat, and 125 depreciating. Those appreciating substantially include the Norwegian krone, the Egyptian pound and the Japanese yen, whereas the Australian dollar, Argentine peso and South African rand will weaken. Workers will have a good year in Romania, China and Hungary, where wages will rise robustly. Demographics continues its relentless transformation of the world's labour markets, with France and Finland joining the list of countries with a shrinking workforce. It will remain China, however, that sees the biggest decline in its working-age population.

What do you think of Chief Economist Baptist 2018 predictions?

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