The global economy was in good shape in 2017, and economic growth reached the highest level since 2011. Amid a synchronised upturn across regions, only few dangers were looming on the horizon. However, in 2018 to date, the global business cycle has lost momentum, not least in Europe. While we expect growth to continue at a softer pace, this is not necessarily a cause for concern, seeing as growth is strong enough for the upturn to continue in the years ahead, leading to lower unemployment.
In “The Big Picture”, our economists share their views on the global economy in the upcoming period and comment on the individual markets.
Highlights from the report "The Big Picture"
- After a strong end to 2017, we see clear signs that the global business cycle is losing momentum in early 2018.
- While the global cycle is softening, we still expect growth to stay above potential in 2018 and 2019, led by the US, China and Emerging Markets.
- Inflation pressures will rise modestly, implying a gradual withdrawal of monetary policy support in advanced economies.
- The risks to our forecast are tilted to the downside from an escalation of trade tension into a full-blown trade war and renewed Italian debt crisis.