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March 01, 2017

Global Economy: Growth, employment head up

Growth, employment head up


  • Expanding 2.3% in 2017, the United States (US) economy is headed for stronggrowth in 2018, aided by a tax package, which prescribes lower taxes, butweighed down by the government shutdown due to funding constraints
  • At 73.1%, the employment rate for the September to November period in theUnited Kingdom (UK) was the highest since 1971
  • In December, China clocked its highest level of trade surplus of $54.7 billion, in2017

Global economic activity got off to a strong start in 2018, with the InternationalMonetary Fund (IMF) pegging global gross domestic product (GDP) growth at 3.7%in 2017 compared with 3.2% in 2016. The pickup in growth has been broad based,with notable upside in Europe and Asia. The IMF has also revised up its globalgrowth forecasts for 2018 and 2019 by 20 basis points (bps) each, to 3.9% in boththe years. The IMF attributed the upward revision to increased global growthmomentum and the expected impact of the recently approved US tax policychanges. However, the IMF has cited rich asset valuations and very compressedterm premiums, which raises possibility of financial market correction, as thedownside to its growth forecast.