State of the Economy: June 2018

The State of the Economy report outlines recent developments in the global, UK and Scottish economies. You may need to select 'refresh' to see the graphics appear.

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Global Summary

Stronger global growth forecast amidst trade tensions.

  • The global economy grew 3.8% in 2017 – its fastest pace since 2011.

  • Stronger growth in Advanced Economies has been driven by higher investment and accommodative monetary conditions.

  • In Emerging Market and Developing Economies, stronger growth has been driven by faster consumption growth and a pick-up in commodity prices for exporting countries.

  • Global activity indicators softened in Q1 2018 alongside an increase in global trade tensions.

  • Underlying momentum is expected to persist with the IMF forecasting growth to accelerate to 3.9% in 2018 and 2019.

G7 GDP Quarterly Growth Rates

Stronger US GDP growth forecast for 2018.

  • US GDP growth accelerated to 2.3% in 2017 (1.5% in 2016), with a pick-up in non-residential fixed investment and exports. Quarterly growth eased slightly in Q1 2018 to 0.5%.

  • The US labour market has remained tight at the start of 2018 with unemployment falling to 3.8% in May while earnings growth has remained broadly stable.

  • US CPI inflation continued its upward trend in May to 2.8% with further upward pressure expected from robust domestic activity (supported by tax cuts) and rising energy prices.

  • US GDP growth is forecast to accelerate to 2.9% in 2018 before easing slightly to 2.7% in 2019.

Commodity Price Indices ($)

Stronger Euro Area growth forecast for 2018.

  • Euro Area growth accelerated in 2017 to 2.5% (1.7% in 2016), however, quarterly growth softened in Q1 2018 to 0.4%.

  • The Euro Area unemployment rate fell slightly in April to 8.5%; the lowest rate since December 2008.

  • Euro Area CPI inflation rose to 1.9% in May (1.3% in April) with Services and Energy driving the increase.

  • Euro Area GDP growth is forecast to accelerate to 2.4% in 2018 supported by stronger underlying economic sentiment.

Headline Annual CPI Inflation

GDP Growth Table


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