The year 2018 looks to be a year of good economic growth around the globe, according to PricewaterhouseCoopers. Global growth is projected to reach 3.7% in purchasing power parity terms next year.
This will be the most rapid expansion of global growth, measured by this metric, in 7 years, the accountancy and professional services firm’s forecasted in its report Monday, news outlets reported.
Unfortunately, PwC’s forecasts are not so bright for the UK. Unemployment across the Group of Seven countries is predicted to reach its lowest level in 40 years below the 5% line. GDP growth is expected to decline from 6.8% to 6.5% in China next year.
Globally, GDP is forecast to reach 3.7%. The US, France and Germany should come in at levels between 2% and 2.5% with Britain only expected to demonstrate a GDP of 1.4%.
PwC said that, for the first time since 2010, it is revising its global growth forecast upwards, bolstered by a robust cyclical recovery in the eurozone and stronger growth in the US.
“We expect global economic growth to be broadly based in 2018, rather than dependent on a few star performers,” said Barret Kupelian, senior economist at PwC.
Even though both the UK and China are expected to show slower growth in the next twelve months, the global economy is expected to bloom in 2018. “Generally, we expect monetary policy to somewhat tighten in the G7, reflecting closing output gaps in some advanced economies and stable inflation expectations,” PwC said.
The firm sees GDP growth in the US picking up from 2.2% this year to 2.4%. It sees French growth rising from 1.8% to 2%. German growth is seen steady at 2.3%, while growth in China slows from 6.8% to 6.5%.
The Organization for Economic Cooperation and Development reported late November that the global economy in 2018 is on pace to have the best year of growth since 2010, which was the snapback year after the Great Recession.
Economists at Bank of America Merrill Lynch said: “The global economy is in the midst of a miniboom that started in mid-2016.”
They expect “solid” 3.8% global growth next year, up from 3.7% this year, with most major economies growing at or above potential.
Their counterparts at Barclays are even more bullish, anticipating that the “self-enforcing economic cycle” will deliver 4% global growth next year.
The International Monetary Fund said recently that annual global growth of 4% or higher was in fact fairly common in the pre-crisis years.
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