Global economy is expected to grow by almost 4 pc, Romania will keep up the trend

The global economy is set to grow by almost 4 percent in 2018 in purchasing power parity (PPP) terms, adding an extra USD 5 trillion to global output at current values, according to new projections in PwC’s Global Economy Watch. At the same time, the analysts see a similar trend of economic development in Romania.

The main engines of the global economy – the US, emerging Asia and the Eurozone – are expected to contribute almost 70 percent of economic growth in 2018 compared to their post-2000 average of around 60 percent.

“In order to have a sustainable economic growth, on the long run, Romania needs to have predictability, financial and fiscal stability and political consensus on major projects. It is necessary that the business environment can count, on the long run, on the same rules of the game, so they can better plan their investments. At the same time, we need to see growth in public investments and increased efficiency of these,” said Ionut Simion, Country Managing Partner PwC Romania.

Growth in the Eurozone is predicted to be above 2 percent in 2018, as PwC expects the peripheral economies to outpace the core for the fifth consecutive year. Of the larger Eurozone economies, the Netherlands is expected to lead the way with economic growth at around 2.5 percent. By contrast, uncertainty relating to Brexit is expected to drag on UK growth, which is predicted to be 1.4 percent in 2018.

“In 2018, we expect global economic activity to grow at its fastest rate since at least 2011, with the three main engines of the global economy – the US, Eurozone and Asia – growing in tandem. However, there are some downside risks businesses should monitoring including the progress of the Brexit negotiations, key elections in large economies and protectionist tendencies in some nice sectors of the economy”, said Barret Kupelian, senior economist at PwC.

China, the world’s largest economy in PPP terms, could grow by 6-7 percent in 2018, slower than previously, but in line with expectation. Amongst the 17 economies that will grow faster than China are India, Ghana, Ethiopia and the Philippines, pointing to broader based growth in Africa and Asian economies. Eight of the ten fastest growing countries in 2018 could be in Africa according to PwC’s analysis.

With the fastest level of growth for several years, 2018 is predicted by PwC to be the most energy hungry on record too. Out of the total energy consumed in 2018, India and China alone are expected to consume 30 percent of global energy.

Despite this, PwC’s outlook predicts oil prices are set to remain broadly stable in real terms, with OPEC and its allies extending its 1.8 million barrels per day supply cut until the end of next year.