Global Economy Contracted To 3.6% in 2018 from 3.8%

The global economy experienced decelerated growth of 3.6 percent in 2018 compared to a 3.8 percent growth in 2017 according to stats by the Kenya National Bureau of Statistics (KNBS).

The advanced economies are estimated to have expanded by 2.4 percent in 2018 compared to a growth of 2.5 percent in 2017 according to the Economic Survey Report for 2019.

The growth was notable in the USA as a result of a fiscal stimulus that boosted domestic demand. The trade wars between the USA and China might hurt both economies if not resolved soon.

Growth in emerging markets and developing economies decelerated from 4.7 percent in 2017 to 4.6 percent in 2018.

Sub-Saharan Africa region remained on a recovery path growing by 3.0 percent during the review period compared to a growth of 2.9 percent in 2017.

In 2018, global inflation rose to 3.6 percent compared to a revised rate of 3.2 percent in 2017, mainly attributable to robust global oil demand.

Prices of agricultural products remained broadly stable but declined slightly in the second half of the year due to the rains witnessed during the year.

Murban ADNOC crude oil prices averaged at US Dollar 71.5 per barrel in the period under review compared to an average price of US Dollar 54.9 per barrel in 2017.

World trade volume rose by 3.9 percent in 2018 compared to a growth of 5.2 percent in 2017. The growth in trade was affected by trade tensions involving major economies and elevated trade policy uncertainties.

The volume of exports in advanced economies grew by 3.4 percent in 2018 compared to a growth of 4.4 percent in 2017.

The volume of exports in the emerging markets and developing economies grew by 4.7 percent in the review period compared to a growth of 6.9 percent in 2017, largely affected by the increase in oil prices.

The overall fiscal deficit as a percentage of GDP stood at 2.9 percent in 2018 compared to 2.3 percent in 2017.

The global economy showed improved labor market conditions during the period under review, with an estimated 3.3 billion people in the labor market. The global unemployment rate dropped from 5.7 percent in 2017 to 5.3 percent in 2018. The labor participation rate stood at 61.4 percent in 2018.