Global economic growth was weaker in the first half of the year than in 2017. The slowdown in growth was particularly prevelant in the advanced economies, while the rate of expansion remained stable in emerging markets. This trend is reflected in global trade, which was down slightly year-on-year in the first four months.
Economic momentum in the advanced economies slowed noticeably, with good capacity utilisation. Exports in particular cooled off and there was a clear slowdown in capital spending after a period of strong growth. By contrast, the emerging markets experienced further solid growth in the first half of 2018, with countries that export raw materials profiting especially from the rise in commodity prices. In the second quarter, the Chinese economy displayed stable growth of 6.7 % – just 0.1 percentage point below the first quarter of 2018. In Russia, the recovery slowed somewhat in the first half of the year, but recent leading indicators point towards steady growth for the remaining months of the year. Economic growth in Ukraine, continued to be adversely affected by reform projects, the national debt and the increasingly problematic financial situation.
Despite the uncertainties surrounding Brexit and US trade policy, numerous indicators suggest steady economic growth for the eurozone. Macroeconomic activity in the eurozone is estimated to have expanded by 2.6 % in the first quarter of 2018 and by 2.2 % in the second quarter.
Outside the eurozone, there was particularly strong growth in Poland and Hungary among the economies of Central and Eastern Europe in the first quarter of 2018. In Romania and the Czech Republic, on the other hand, the economies slowed in the first three months of 2018 following strong growth in the previous quarter.
Economic growth in Germany was generally steady, but did experience a slightly weaker phase in the first half of the year. For the second quarter of 2018, however, the economic barometer issued by the German Institute for Economic Research (DIW) indicates renewed quarter-on-quarter growth in gross domestic product (GDP) of 0.4 %. Despite fears of a global trade war, German foreign trade gained momentum in the first five months of 2018. Exports increased by 3.2 % in the months from January to May 2018 compared to the same period of the previous year – and imports also climbed by 3.8 %.