OPEC Monthly Oil Market Report – August 2017
The latest economic indicators have confirmed a continuation of the improving dynamic in the global
economy. In the OECD, strengthening growth in the US, stable quarterly growth in the Euro-zone and
improving economic activity in Japan are all supportive for the global economy. In the non-OECD
economies, China is showing better-than-expected growth, India is forecast to keep a high growth level, and
Brazil and Russia are recovering from their two-year recession. Global economic growth is forecast at 3.4%
for 2017 and 2018, considerably higher than last year’s growth of 3.0%.
As the economic development in the OECD group of countries is improving, the OECD’s GDP growth in
2017 and 2018 is forecast at 2.0%, up from 1.7% in 2016. Also, the major emerging economies are holding
up well with China now forecast to grow at 6.7% in 2017 and 6.3% in 2018. India is expected to grow by
7.0% in 2017 and rebound to 7.5% in 2018, supported by ongoing structural reforms. Russia and Brazil will
also continue their recovery and are forecast to grow by 1.2% and 0.5% in 2017 and by 1.4% and 1.5% in
2018, respectively, though this also depends on the development of commodity prices and political
developments, as well as the presidential elections in both countries in the coming year.
With the ongoing growth momentum and its expected continuation in 2H17, there is still some room to the
upside for currently anticipated global growth levels. At the same time, challenges remain mainly related to
global political developments and upcoming monetary policy decisions, particularly the US and the
Euro-zone. Seemingly high valuations in equity and bond markets, in combination with low volatility, pose
one risk as well, at a time when central banks have become more willing to reduce monetary stimulus
measures. Also, debt levels remain high in some key economies an issue that will probably require further
attention if interest rates continue to rise gradually, particularly in the US. Finally, sustained stability in
commodity prices, particularly oil prices, is viewed as necessary for ongoing improvements in global
Table 3 - 1: Economic growth rate and revision, 2017-2018*, %
After a relatively low and downwardly revised 1Q17 GDP growth of only 1.2% q-o-q at a seasonally adjusted
annualised rate (SAAR), the growth dynamic in 2Q17 recovered and GDP grew by 2.6% q-o-q SAAR.
Importantly, consumption was the main driver, expanding by 2.8% q-o-q SAAR. As in the 1Q17, exports
were also performing well, growing by 4.1% q-o-q SAAR, after 7.3% q-o-q SAAR in the 1Q17, despite a
relatively strong US dollar. Moreover, investments continued to grow with a considerable share coming from
the energy sector.
World OECD US Japan
zone UK China India Brazil Russia
3.4 2.0 2.1 1.4 2.0 1.5 6.7 7.0 0.5 1.2
Change from previous month
0.0 0.0 -0.1 0.0 0.2 0.0 0.1 0.0 0.0 0.0
3.4 2.0 2.2 1.1 1.8 1.4 6.3 7.5 1.5 1.4
Change from previous month
0.0 0.1 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0
Note: * 2017 and 2018 = Forecast.
Source: OPEC Secretariat.