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Nigeria Strategy Report H2 2018 Excerpts- Supportive global monetary policy to consolidate global growth over 2018

• Over the next few weeks, we will feature excerpts from our core strategy document – The Nigeria Strategy Report. The report communicates our understanding on key happenings in global and domestic financial markets over H1 2018 and provides our insight on what we believe will be the major themes underpinning investor sentiment for the rest of 2018. We begin the series with a look at the major themes that dominated the global economic and financial landscape in H1 2018 as well as our outlook for the rest of the year.
• The year 2018 started with worries that the high base of 2017 and protectionism rhetoric between US and China would have a reverberating effect on global growth. Over H1 2018, the duo of stronger growth across emerging markets – relaying the still elevated commodity prices, especially for oil exporting countries – and growth resilience in advanced economies have re-shaped the landscape with consensus global growth now far exceeding the view at the start of the year.
• For the rest of the year, we are more optimistic on growth across advanced and emerging economies, reflecting improvement in consumer and business sentiment, supportive global monetary policy stance and fiscal stimulus. Consequently, global economy is now forecast to increase by 3.9% YoY. While reasons abound for investors to be cautious going into the second half of the year with the trade protectionism tariffs now in effect, we believe the impact would be a switch in trade from one region to another, without any major impact on overall global growth. In advanced economies, growth is projected to peak at 2.5% YoY in 2018, while growth in EMs is projected 10bps higher than 2017 reading at 4.9% YoY, a reflection of the still elevated commodity prices, improved confidence in the region and a stronger projected growth in the middle east and Latin America over 2019.