Publication - Corporate report

State of the Economy: June 2018

Published: 29 Jun 2018
Directorate:
Chief Economist Directorate
Part of:
Economy
ISBN:
9781787810785

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.

16 page PDF

1.7 MB

16 page PDF

1.7 MB

Contents
State of the Economy: June 2018
Global Summary

16 page PDF

1.7 MB

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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