According to the Carlson Wagonlit Travel report “2018 Global Travel Forecast”, global economic prospects are improving in 2017, as the International Monetary Fund is expecting 3.5% global economic growth for the year.
This is in contrast to 2016, where global economic growth was 3.1%, its slowest growth since 2009.
2018 should see further improvement as the global economy is expected to grow at 3.6%. The growth is expected to be driven by rising consumer and business confidence, as well as recovery in manufacturing, investment and trade. Trade has begun to recover around the world after five years of slow growth. However, there is some concern if protectionist trade rhetoric becomes policy with more restrictions in the United States and other key markets. If that happens, a recovery is likely to be short-lived. Additionally, withdrawal by key countries from multi-lateral agreements such as Brexit and the Paris Climate Agreement is also causing concern.
Emerging markets now account for approximately 75% of global economic growth and are central to global performance. Yet tightening financial conditions could suppress further growth. Meanwhile, developed markets are also exhibiting signs of accelerating growth.
Currency dynamics, inflation and oil prices all remain central to an outlook for the global economy and global travel prices in 2018. The U.S. dollar has continued to strengthen against the Euro and the Yen. Normalizing interest rates in the U.S. and continued accommodative policy suggest the dollar could continue to strengthen in 2018. Inflation has been on the rise, mainly driven by an increase in oil prices as the average price of crude oil is expected to rise 24% this year and another 5% in 2018. This trend will help boost exporting economies, but may be a headwind on a global scale. These factors, along with modest economic growth, will help keep global inflation mostly in-check, around 3% next year.
Furthermore, trips to be more expensive in 2018 and European hotel prices will rise by 6.3%
Read full report here.
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Source: carlsonwagonlit.fr
Photo Source: Wikimedia Commons Copyright: AxelBoldt License: CC-BY-SA
