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World Economy

OPEC Monthly Oil Market Report – August 2017


Graph 3 - 1: Manufacturing and non-manufacturing ISM indices

Due to the lacklustre growth in the particularly the 1Q17, the

GDP growth

forecast for 2017 has been

revised down slightly to 2.1% from 2.2% in the previous month. The level of growth for 2018 remains

unchanged at 2.2%. Further upside to GDP growth may materialise if the government successfully pursues

envisaged reforms, particularly tax reforms. However, numerous uncertainties remain, mainly in the areas for

political decisions, and also monetary policies remain uncertain and to some extent dependent on the

upcoming debt ceiling decisions.


The economy of Canada continues to improve significantly.

Industrial production

increased by 10.6% y-o-y

in May, the highest rate since 2000 and compared with 4.4% in April. This positive momentum remained

supported by rising exports, which have been boosted by improvements in the oil sector and the improving

US market, as well by general improvements in global trade.


rose by 12.4% y-o-y in June, after

17.6% y-o-y in May and after reaching 14.4% y-o-y in April. Retail trade also continued to expand at the

considerable level of 10.3% y-o-y in May, after 4.5% y-o-y in April. This is the highest level of growth since

the beginning of 2010. The


for manufacturing rose too and reached 55.5 in July, after 54.7 in June and

reaching 55.1 in May. Taking this positive momentum into consideration, the

GDP growth

forecast for 2017

was revised up to 2.3% from 2.1%. Growth in 2018 remains unchanged at 1.9%.

OECD Asia Pacific


The latest economic indicators confirm the continuation of Japan’s gradual economic expansion. This is

supported by growth in exports, investments, healthy domestic demand and ongoing monetary and fiscal

stimulus. As the labour market remains extremely tight and since industrial resources are also being utilised

at around full capacity, the upside from the current annual growth level of around more than 1% is very

limited. Structural reforms would need to continue to lift the growth level over the medium- to the long-term.

Business sentiment is holding up well and also supporting the current growth trend. Inflation remained in

positive territory, though it remains very low, and wages unexpectedly declined in June. This income

situation is adding some caution about the near-term development. Given that there is technically full

employment in Japan’s economy, rising income would be the important key determinant to raise consumer

sentiment and also inflation. In the meantime, the Bank of Japan (BoJ) continued its monetary stimulus and

also acknowledged that the inflation target of 2.0% may only be reached in 2019. Moreover, the recent

changes in the Prime Minister’s cabinet seem to add stability as well, after some period of rising political








Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17


ISM manufacturing index

ISM non-manufacturing index

Sources: Institute for Supply Management and Haver Analytics.