World Economy Review - October 2018
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Growth is slowing in a number of the world`s big economies, and the International Monetary Fund is warning that investor sentiment could make a "sudden reversal" for the worse.
"Although still supportive of growth, global financial conditions have started to tighten," the fund said in its latest Regional Economic Outlook report for Middle East and Central Asia.
The report is published annually and gives a broad overview of recent economic developments and of prospects and policy issues for the medium term.
"Global conditions are changing in terms of the risk metrics," Jihad Azour, director of the Middle East and Central Asia at the IMF, told CNBC`s "Capital Connection."
"Although we`re still enjoying a high level of growth, that growth is plateauing," he added.
The IMF said higher U.S. interest rates, a stronger U.S. dollar, and financial market volatility could bring pressure in some emerging-market and developing economies.
"A worsening of these developments, or faster-than-anticipated monetary policy tightening in advanced economies, increases the risk of a sudden reversal in global risk appetite," the report said.
The IMF forecasts global growth for 2018-2019 to remain steady at its 2017 level of 3.7 percent, but the growth outlook for a number of major economies has been marked down.
In the United States, while the real GDP growth outlook for 2018 is unchanged at 2.9 percent, the forecast for 2019 has been revised down to 2.5 percent due to the recently announced trade measures.
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The World Economy
World GDP Growth, %
The world economy can be evaluated in various ways, depending on the model used, and this valuation can then be represented in various ways (for example, in 2006 US dollars). It is inseparable from the geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth.
For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on Mars would not be considered a part of the world economy - even if currently exploited in some way - and could be considered of latent value only in the same way as uncreated intellectual property, such as a previously unconceived invention. Beyond the minimum standard of concerning value in production, use, and exchange on the planet Earth, definitions, representations, models, and valuations of the world economy vary widely.
It is common to limit questions of the world economy exclusively to Human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and prostitution, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.