Publication - Progress report

State of the economy: October 2018

Published: 23 Oct 2018
Directorate:
Chief Economist Directorate
Part of:
Economy
ISBN:
9781787813144

Report produced tri-annually by the Chief Economic Adviser to provide a picture of the Scottish economy in an international context.

State of the economy: October 2018
Global Summary

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

OECD Composite Leading Indicators

Commodity Price Indices ($)

Commodity Price Indices ($)

Headline Annual CPI Inflation

Headline Annual CPI Inflation
GDP Growth (%) Outturn Projections Revisions from April 2018
IMF WEO (Oct 2018) 2017 2018 2019 2018 2019
World Output 3.7 3.7 3.7 -0.2 -0.2
Advanced Economies 2.3 2.4 2.1 -0.1 -0.1
United States 2.2 2.9 2.5 0.0 -0.2
Euro Area 2.4 2.0 1.9 -0.4 -0.1
United Kingdom 1.7 1.4 1.5 -0.2 0.0
Japan 1.7 1.1 0.9 -0.1 0.0
Emerging Markets and Developing Economies 4.7 4.7 4.7 -0.2 -0.4
China 6.9 6.6 6.2 0.0 -0.2
India 6.7 7.3 7.4 -0.1 -0.4
Brazil 1.0 1.4 2.4 -0.9 -0.1
Russia 1.5 1.7 1.8 0.0 0.3
South Africa 1.3 0.8 1.4 -0.7 -0.3

Contact

Email: Office of the Chief Economic Adviser