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World Economy


OPEC Monthly Oil Market Report – September 2017

Graph 3 - 2: Japanese retail trade

Graph 3 - 3: Japanese PMIs

The latest


numbers confirmed a healthy trend as they remained almost unchanged and above the

growth-indicating level of 50 in August. The manufacturing PMI stood at 52.2 in August, after reaching 52.1

in July. The services sector PMI slowed a bit, moving down to 51.6 in August from 52.0 in July.

The most recent developments confirm a solid underlying growth dynamic in the Japanese economy, but

uncertainties in the 2H17 remain. Hence the 2017 GDP growth forecast remains unchanged at 1.4%

Moreover, numerous issues persist, and given the tight labour market situation and high-capacity

utilisation rates, further growth advancements seem challenging. Moreover, the income situation – in

combination with consumption and inflation – will need to be closely watched in the coming months. The

2018 growth forecast was lifted slightly, now standing at 1.2% compared with 1.1% in the past month.

South Korea

South Korea’s economy continues to perform well, but geopolitical concerns on the Korean-Peninsula and

some economic indicators are sending mixed signals that indicate challenges still persist. So far the ongoing

conflict with its neighbour had little economic impact, as consumer sentiment is holding up well and industrial

production and some lead indicators also support a good trend in the short-term. Industrial production rose

by 2.3% y-o-y in July, much better than the 1.6% y-o-y in June and 1.7% y-o-y in May. The latest PMI

number for the manufacturing sector in June indicated some slow down, remaining below the growth-

indicating level of 50, while at the same time improving to 49.9 in August from 49.1 in July. GDP growth was

confirmed at 2.9% y-o-y in 1Q17 and 2.7% y-o-y in 2Q17. While some softening signs remain, solid 1H17

momentum led to an upward revision in 2017 GDP growth to 2.7% in 2017 from 2.6% the previous month.

Growth figures for 2018 remain unchanged at 2.4%.

OECD Europe


The Euro-zone’s economic performance remained stronger than expected. Momentum from

robust growth

in 1H17 was carried over into 2H17. This positive trend is visible in all economies at varying rates, with

improving performance not only in the major economies, but also in the so-called peripheral economies,

which are all recovering to some extent and are supporting the growth trend. The labour market improved in

the past months, leading to better domestic consumption, and while positive developments lifted economic

activity, room to the upside remained. On the sensitive price front, core inflation remained low, but this could

provide further room for improvement. While the European Central Bank (ECB) hinted again that its

monetary stimulus will potentially be reduced at some point, the low inflation pattern probably makes it more

flexible. Business sentiment reflects the bettering situation, with the European Commission’s economic

sentiment index improving to 111.9 in August from 111.3 in July. This – in combination with comments by the

ECB’s president about possibly reducing monetary stimulus, at least to provide further details on phasing out

quantitative easing in the upcoming October meeting, and the latest developments in the US, which is










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

Sources: Ministry of Economy, Trade and Industry and

Haver Analytics.

% change y-o-y











Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17


Sources: IHS Markit, Nikkei and Haver Analytics.

Services PMI

Manufacturing PMI