OPEC Monthly Oil Market Report – November 2017
The global economic growth dynamic has continued its broad-based and relatively strong momentum.
Particularly the OECD economic growth trend was better than expected so far this year. Moreover, the
potential tax reform in the US, the ongoing dynamic in the Euro-zone and, to some extent, in Japan, solid
growth in China and an improving situation in Russia and Brazil are all lifting the GDP growth forecast to
3.7% in 2017 and in 2018.
Supported by a continued strong momentum in 3Q17, OECD GDP growth was revised up in 2017 to 2.3%
from 2.2%; and the OECD’s 2018 GDP growth forecast was revised up to 2.2% from 2.1%. This uptick was
mainly supported by expectations of an ongoing strong growth dynamic in the Euro-zone and the US in the
coming year, the latter of which may gain further support through a potential tax cut. In the emerging
economies, China’s growth was better than expected in 2017 and consequently revised up to 6.8% for 2017
and to 6.5% in 2018. India’s growth trend still seems to be impacted by the after-effects of its reforms that
were implemented in the past months. This has led to a slight downward revision in both 2017 and 2018, but
growth is expected to pick up in the coming year to reach 7.4%, after this year’s growth of 6.8%. Brazil and
Russia’s recovery will continue in 2018. Brazil’s growth has been lifted to 0.7% in 2017, before reaching
1.5% in 2018. Russia’s growth has been lifted to 1.8% in 2018, the same growth level as in 2017.
While the ongoing momentum could still provide some slight upside potential, numerous uncertainties prevail
that – if to materialize – could unfold quickly and considerably, impacting global economic growth. Among
the most influential uncertainties in the near term are geo-political developments, in addition to the pace of
monetary policy normalisation, in combination with high debt levels in many countries and considerable
valuations in asset markets. Moreover, stability in the oil market remains a key-determinant for global
Table 3 - 1: Economic growth rate and revision, 2017-2018*, %
Underlying economic growth in the US
is showing continued strength, with 3Q17 GDP reaching growth of
3.0% q-o-q at a seasonally adjusted annualised rate (SAAR) in the first of three estimates. This growth
number would have been presumably even higher without the negative effects of the hurricane season in
August and September. While growth is now forecast to be lower in 4Q17, particularly the rising consumer
confidence, amid the recovery in the labour market, is pointing at a continued solid growth trend.
World OECD US Japan
zone UK China India Brazil Russia
3.7 2.3 2.2 1.6 2.3 1.5 6.8 6.8 0.7 1.8
Change from previous month
0.1 0.1 0.1 0.0 0.1 0.0 0.1 -0.1 0.2 0.0
3.7 2.2 2.4 1.3 2.1 1.4 6.5 7.4 1.5 1.8
Change from previous month
0.2 0.1 0.1 0.1 0.2 0.0 0.2 -0.1 0.0 0.2
Note: * 2017 = Estimate and 2018 = Forecast.
Source: OPEC Secretariat.