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Global economic growth exceeded expectations in 2017, and we expect
another strong year in 2018. The Citi Global Economic Surprise Index, which
was well above zero for most of the second half of 2017, signaled that global
economic data was exceeding expectations [Figure 1]. Drivers of strong global
performance in 2017 included steady growth in the United States, better-thanexpected
economic data in Europe, continued positive performance from Japan,
and stabilization in China following several years of deceleration.


We expect the global economy to expand at a rate of 3.7% in 2018, measured
by gross domestic product (GDP). Monetary policy has been a major driver of
growth in the developed world in recent years, but with global central banks
starting to rein in stimulus measures, fiscal policy may become a bigger factor.
We expect employment growth, and the continued consumption growth it
should enable, to continue to be supportive for the global economy in 2018.
Business spending, which has been lackluster during most of the expansion,
may also make a comeback, potentially adding to growth.


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