At T.Rowe Price, we believe the global economy looks set to carry much of its recent momentum into 2018, although growth is likely to be slower than what we saw in mid-2017. Trends such as healthier government finances among the more indebted euro-area countries and improving trade in the emerging markets have put the global economy on a more stable footing, which should help it to withstand any withdrawal of loose monetary policy

 Key Points

  • We expect the global economy to carry much of its recent momentum into 2018, although growth is likely to be slower than what we saw in mid-2017.
  • Companies' investment in production capacity has become the main driver of economic growth.
  • A more balanced global economy is well positioned for central banks to start unwinding Quantitative Easing (QE).
  • Tighter labour markets in the U.S. and other advanced economies are likely to lift wage growth, but inflation should remain subdued.

Major economies marching to the same drum

All major economies accelerated in unison for the first time in almost a decade. Growth among commodity exporters, Brazil, Mexico and Russia led the way, while Japan and major developed economies in Europe also performed well. Although growth may slow in 2018, we expect the global economy to carry much of its momentum into the new year.  Read our 2018 Global Market Outlook. 

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