State of the economy: October 2018

Global Summary

Global growth remains resilient in 2018.

• Following faster grow in 2017, the pace of global growth has stabilised in the first half of 2018.
• The IMF report growth has become less synchronised in 2018 with a more mixed picture across Advanced Economies and Emerging Market and Developing Economies.
• World trade volumes have moderated slightly in 2018 with heightened trade tensions a key factor for the outlook.
• Higher oil prices have supported activity for energy exporters and has contributed to upward pressure on inflation.
• Despite greater imbalances, the IMF forecast growth to remain stable in 2018 and 2019 at 3.7%.

US GDP growth remains solid in 2018.

• US GDP growth continued to strengthen in the first half of 2018 growing 2.9% in Q2 (annually), up from 2.6% in Q1.
• The US labour market remains buoyant in the second half of 2018 with unemployment falling to 3.7% in September.
• Average hourly earnings rose 2.8% annually (0.5% in real terms).
• US CPI inflation picked-up to 2.9% in June/July before easing back to 2.3% in September.
• The IMF forecast US GDP growth to accelerate to 2.9% in 2018 before easing slightly to 2.5% in 2019.

Euro Area growth has eased in 2018.

• Euro Area growth has moderated in 2018 growing 2.1% annually in Q2, down from 2.4% previously.
• The Euro Area unemployment rate fell to 8.1% in August, the lowest rate since November 2008.
• Latest data show unemployment rates ranged from 3.4% in Germany to 19.1% in Greece.
• Euro Area CPI inflation rose to 2.1 in September with Food and Drink and Energy driving the increase.
• The IMF forecast Euro Area GDP growth to slow to 2% in 2018 and again in 2019 to 1.9%.

OECD Composite Leading Indicators

Commodity Price Indices ($)

Headline Annual CPI Inflation