The World economy will be facing the biggest economic challenges in the year 2018, which may lead to the slow growth environment, and fast approaching productivity growth crisis. The great economic crisis may also be faced due to threatening labor shortage and deficiencies in the areas of highly required skills in mature economies. Uncertainties and increasing risk factors in the field of global economic growth is increasing day by day, and by the mid of 2018 this will lack the demand drivers as well as the potential outputs. 2017 was considered the “G-Zero world”, which means a world with no leaders. Hence it has become very important to analyze during 2018 whether the information and the communication technology sector will help in the rescue of the gradually slowing down global economy in the upcoming years. A number factors may be taken into consideration for the slowing down of the economy in l=”nofollow”the forthcoming year, which can be the decreasing interest of the U.S. in assuming the leadership, weaker allies of U.S., China and Russia claiming themselves as economic and security alternatives to the U.S., the Trans-Pacific Partnership collapse, and the recent victory of Russia in Syria. These all factors lead to a “G-zero world”.
Top 5 Economic challenges could be faced by the world in 2018
- Global growth: It has been forecasted by the International Monetary Fund a faster rise of global growth from 3.4% in the year 2017 to 3.6% by 2018. But chances of large number of challenges and risks also lie over there which could lead to the derail of the recovery.
- Huge changes to the US tax policy: Due to major tax cuts declared by the US President Trump, after his election, it could lead to one of the largest uncertainties in the forecast of the IMF over US fiscal policy. The US growth can also accelerate in its way due to the expected trillion spending on the infrastructure.
- Rebalancing of Chinese savings: In the past few years China has started relying more on domestic consumption rather than depending on the exports. This has lead to the worry of global unsustainability. The switching of these Chinese dependencies may also be considered as an effective recycling of Chinese savings which may lead to a high growth rate of 20% per annum, in credit.
- Weathering the political storms of Europe: Although the EU economy has grown much higher in the last year, which is even higher than the average growth from, 2008-2016, still this growth can’t be considered as strong enough to remove the dent in unemployment. With some more changes over the coming years any political turbulence may lead to the chances of the growth back of the Europe political storms.
Battles over trade eroding the growth: It is very difficult to meet the long-term average growth of 5% per year. And with the US administration raising concerns about the unfair trade, it seems restrictions on the growth of global trade and which is becoming the one of the greatest risks of 2018.