Page 12 - Economic report 2018

to see a very high rate of GDP growth (6.8% in 2018) which could even improve in 2019, to
be explained by expansionary monetary and tax measures that have encouraged investment
and consumption.

In Latin America, the falls in GDP in Argentina and Venezuela are notable (-2.5% and -18%
in 2018, respectively), which were much greater than expected, while Mexico and Brazil
maintained a similar rate of growth to the previous year (2% and 1.1%, respectively) although
the 2019 outlooks for both economies have both been lowered.

European developing economies felt the effects of the slowdown in the main European countries,
growing 3.6% globally, compared with 6.1% in 2017. Russia, on the other hand, saw its growth
rate accelerate by seven tenths, to 2.3%,
thanks to the trend of rising oil prices and the
Chart 1.2
fiscal stimulus policies that were introduced. GDP GROWTH - Annual variation rates, in %

Finally, in the Middle East and North Africa,
GDP growth slowed five tenths, to 1.6% in
2018, due to falling commodity prices (except
oil) and geopolitical tensions from the civil
wars in Syria and Yemen, as well as the impact
of the new sanctions on Iran.

As for the advanced countries, the economic
trend in 2018 was marked by favourable
macroeconomic data in the USA and weak USA Eurozone
10 f: IMF forecasts (July 2019).
data in Europe. So, the USA saw growth
accelerate by seven tenths to 2.9%, while Source: IMF.
the Eurozone economy slowed half a point
to 1.9%. GDP growth in Japan also slowed from 1.9% in 2017 to 0.8% in 2018. Outside the
Eurozone, GDP growth in the United Kingdom slowed four tenths to 1.4% in 2018, prolonging
the slowdown that started in 2014. According to the IMF, it could grow at a similar rate in 2019
The external environment of the Andorran economy | I. The international economy
(1.3%), although this outlook is subject to major uncertainty caused by Brexit.

US economy on the rise in a The US economy has continued to be one of

context of full employment. the main drivers of global expansion, and has
dispersed any doubts about its sustainability.
In 2018, GDP growth was 2.9%, the highest
rate since 2015. Growth was supported by a good performance in consumption and investment.
In contrast, foreign demand made a negative contribution of two tenths because imports grew
more than exports, which slowed due to dollar appreciation and the trade war with China. So,
in 2018, the current account deficit stayed at 2.4% of GDP for the fourth consecutive year. The
dynamism of the US economy was based on still favourable monetary conditions even after the
rises in interest rates, driven by the expansionary fiscal programmes introduced by the Trump
administration at the end of 2017 (cuts in corporate taxes and a temporary authorisation to
account for investment wholly as expenses under corporate tax). The favourable trend in the
US economy led to a continuous improvement in the results of the labour market. The annual
rate of growth in employment accelerated to 1.6%, putting the unemployment rate at 3.9% in
2018, a historic low that can be considered full employment.

For its part, inflation followed the trend marked by oil prices throughout the year, characterised
by a rising first half and a falling second half, ending at 1.9% in December. Wage rises also
contributed to inflation, in a context of full employment, as wages per employee rose on