Global Outlook – Economic Watch – February 2018

Growth momentum continues, with some signs of exhaustion in confidence levels
Growth slowed down slightly in 4Q17, but remained robust. Data so far point to a short-lived moderation. Our BBVA-GAIN model estimates global GDP to grow at 1% QoQ in 1Q18, after 0.9% by end-2017.
The good momentum is shared by the three main areas, with growth above potential in both the US and the EZ (both at around 2.4% annualized in 4Q17) and stabilizing in China (6.8% YoY). In EM’s, gradual recovery proceeds in Latam.
Global trade gained further momentum by the end of 2017, benefiting from the recovery of investment and the industrial sector, including in EM’s.
Resilient retail sales suggest that private consumption continued to support growth, but it has stabilized, except in Latam.
Confidence is at very strong levels so far in 1Q17, though it gives some signs of expected exhaustion (in the Eurozone), suggesting that the peak of growth could be behind us.
Core inflation, though still at low levels, showed slight upward pressures in advanced economies. It is still slowing in Latam.

Fuente: BBVA Research

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