World Economic Situation and Prospects
Global macroeconomic outlook
Urgent and concrete policy actions are needed to reduce risks to the global economy and lay the foundation for stable and sustainable economic growth. The dynamism and inclusiveness of the global economy are key to meeting the ambitious targets of the 2030 Agenda for Sustainable Development. Policymakers must work to avoid increasing short-term risks from financial difficulties and escalating trade disputes and continue to pursue economic, social and environmental goals as part of a longer-term development strategy. Decisive policy action is underpinned by a multilateral, cooperative and long-term approach to global policies in key areas such as combating climate change, sustainable finance, sustainable production and consumption, and addressing inequalities. It also requires further progress toward a more inclusive, flexible and responsive multilateral system.
At first glance, global economic growth appears stable, but it hides fundamental risks and imbalances
In 2017 and 2018, more than half of the world’s economies increased their growth rates. Developed economies grew steadily at 2.2 percent in those two years, and in many countries those growth rates were close to their maximum potential, while unemployment rates fell to record lows in several advanced economies. Among developing countries, growth remained relatively strong in the East and South Asian regions, with economic growth of 5.8 percent and 5.6 percent, respectively, in 2018. Many commodity-exporting economies, particularly fuel exporters, continue their gradual recovery, although these countries continue to face price volatility. The sharp fall in market prices for commodities that occurred in 2014/15 also continues to affect the balance of budgets and balance of payments and is the cause of persistent debt.
Global economic growth remained steady at 3.1 percent in 2018 as the slowdown in several major economies was offset by an acceleration in the United States due to fiscal measures. The global economy is expected to grow well into 2019 at 3 percent, but signs that growth may have peaked are becoming increasingly clear. Since the beginning of 2018, growth in industrial output and trade in goods around the world has gradually slowed, primarily in the heavily trade-dependent sectors of capital goods and intermediate products. Leading indicators suggest that 2019 will see some weakening of economic growth in many countries due to worsening trade disputes, increased risk of financial distress and instability, and in the context of geopolitical tensions. At the same time, a number of developed countries are already experiencing fairly high capacity utilization rates, which could affect growth in the short term.