Global Economics Monthly Review
May 8, 2018
Global economic growth moderated slightly in the first quarter of the year. Based on recently released data, economic slowdowns were registered in the US, EA, UK, Japan, and China. The slowdowns were expected, and occurred due to, among other things, base effects after solid growth at the end of 2017, and seasonal factors. Based on leading indicators, global growth is expected to somewhat accelerate in the coming quarters, driven by healthy improvement in the labor market, positive business and consumer sentiments, supportive credit conditions, and the stimulus fiscal policy in the US. Despite the expected improvement in growth, the IMF estimates that global risks are rising, with the main risks being a possible sharp tightening of financial conditions and a potential shift toward protectionist policies. Moreover, geopolitical strains remain also a major risk to macroeconomic estimates against the backdrop of the tension in the Middle East and uncertainty regarding the Iranian nuclear deal. In addition, despite the encouraging initial talks between the Korean leaders, it is still too early to draw conclusions regarding the risks in that region and to global macroeconomic environment
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