It’s been a good year for the economy—but 2018 might not go so smoothlyby George Magnus / December 12, 2017 / Leave a comment
With Christmas rapidly approaching, and 2018 just round the corner, it is time to down tools and consider some lessons from the world of economics this year. You might spend your Christmas eve watching the Festival of Nine Lessons and Carols at King’s College, Cambridge. To keep it seasonal, I’ve gone for nine lessons here, too.
So how did the economy perform, and what are the takeaways?
- Global growth was more solid and synchronised than expected
The world economy had a decent year. Global economic growth developed stronger sea-legs, and spread to important countries that had previously been plagued by recession and/or scandal, for example Brazil, South Africa and Russia. For the first time since the financial crisis, no major country or region experienced an economic contraction. The most welcome surprise, perhaps, was the build-up in cyclical economic expansion in the eurozone. The most predictable disappointment was the UK.
The International Monetary Fund’s October forecasts suggested that after 3.6 per cent in 2017—roughly the same as the average from 1990-2007—global growth momentum will roll over into 2018. But watch out. We normally have a business cycle downturn every 10 years or so, and the last one was in 2009. Don’t say you weren’t warned.