July 11, 2018 ( Lagos ) :At the start of the year, analysts had estimated a 10bps expansion in global GDP growth to 3.7% over 2018, reflecting their prognosis of improved output in emerging and developing economies (EMs) which will offset slower growth in advanced economies (DMs). The basis for their views was hinged on a recovery across EMs with support stemming from a rebound in commodity prices, doused political uncertainty as well as strong momentum in trade and consumption. 

Expectedly, first quarter economic numbers across the globe came out strong, with growth tracking higher relative to prior quarter (+20bps to 3.4% YoY), following stronger than expected growth in EMs (+60bps QoQ to 5.5%) which offset the slower growth in DMs (-60bps QoQ to 1.9%). 

The sturdy growth in EMs was largely underpinned by the knock-on effect of higher commodity prices and improved global trade on consumer spending and stronger private capital investment across the region. On the other hand, the sluggish growth in advanced economies emanated from slowdown in personal consumption expenditure and currency induced contraction in external demand.

Source: ARM Securities Limited

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