Our world revolves around finances, it’s an inevitable vicious circle. Every year, there are always economic changes that affect our countries for better or for worse. It should be noted that we’re always in a constant flux of recession and development. Taking into account that this is a sensitive issue, it’s worth asking what’s glimpsed for the world economy in 2018.

Forecasts of the global economy in 2018

During the last 10 years of humanity, various ups and downs in the economy have occurred. We’re talking about that in certain countries the crisis has passed momentarily while in others there was a moment of remarkable improvements. But it would be good to start things by mentioning the information of the World Bank. Which established that the world economy would expand by 3.1% in 2018.

They published this in a press release on June 5 of this year. In which they also added that the world economy would end up slowing down in the next two years. The president of this financial institution, Jim Yong Kim, said that if this growth is maintained it could reduce extreme poverty. But particularly in “fast growing economies of South Asia.”

Jim Yong Kim World Economy 2018
Jim Yong Kim commented that policymakers must find ways to support growth in the long term, “in order to accelerate progress towards the goals of ending poverty and boosting shared prosperity.” Source: The Business Journals

Based on this information, it’s forecast that there’ll be growth in developing economies and emerging markets. Which is estimated at 4.5% by 2018 and subsequently 4.9% by 2019. According to the World Bank, this’ll happen because commodity-exporting countries will recover more. And that after the increase of this year, their prices will stabilize.

The United Nations Organization also supports this information. Explaining that the expansion of the developed economies is due to this acceleration of the global Gross Domestic Product (GDP). However, this organization says that the “economic benefits” of the world continue unequal. Namely, there are still countries and regions where the economy has not yet grown vigorously.

Development of the world economy by continent

The International Monetary Fund (IMF) has also released a report on this. For their part, they explain that the world economy will grow almost 4% between 2018 and 2019. On April 17 of this year they announced that the situation would improve particularly during the month of October. But they warned that the growth rates of emerging and developing countries wouldn’t last long. In any case, they exhorted the world to take advantage of the good times.

Now, we have to make a breakdown of economic growth by region. And for this, it’s possible to resort to an analysis done by the Uruguayan economist Laura Raffo. Who’s also an economic columnist on the Uruguayan TV channel Teledoce. Through a newscast on this channel called Telemundo, she explains how the global economy has evolved in 2018 and what’s forecast for the future.

Telemundo World Economy 2018
Laura Raffo (right) during a live newscast showing the growth of the world economy according to data from the IMF and the World Economic Outlook (WEO) 2018. Source: Teledoce

As can be seen in the previous graph, the continent with the best development has been Asia. With a growth of 5.6%. Followed by Africa, who curiously has an increase of 3.4%. North America and Europe continue with 2.8% and 2.7% respectively, continents that have been recovering from the crisis according to Raffo. South America is the least hopeful index, with barely 2% growth.

However, we must add additional data. Raffo explains that the IMF and the WEO expect that these numbers will be adjusted in the future. Both for the better and for the worse. And she warns that in addition to these changes, some risks will show up worldwide. The first is that there could be worse credit conditions. The second revolves around geopolitical tensions. The third involves possible commercial wars and the fourth, volatility in the stock markets.

Proteccionism World Economy 2018
Another very important threat to the world economy is protectionism, which could affect growth and create trade tensions. On the other hand, there’s the increase in global public and private debt, which increased to 225% according to the IMF.

Finally, according to a report by the World Economic Forum, the strongest economies in the world, from highest to lowest, are: the United States, China, Japan, Germany and the United Kingdom. But as all the info seen so far indicates, it’s expected that the Asian continent will take the lead in the future. Particularly China and India, whose GDPs could exceed that of the US. It only remains to wait to see how these changes take place in the coming years.

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What do you think about the forecast of our economy?