## 1. Domestic Expansion Running into External Turbulence

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### Recent Activity and Growth Developments
- Activity continued to expand in the first half of 2018, but at a slower-than-expected pace, mainly in advanced Europe.
- Growth is now projected to slow from 2.8 percent in 2017 to 2.3 percent in 2018 and 1.9 percent in 2019, down from respective projections of 2.6 percent and 2.2 percent in the May 2018 Regional Economic Outlook: Europe.
- In the euro area, GDP growth cooled to 0.2 percent in the third quarter (quarter-on-quarter, annual rate), from 0.4 percent in each of the first two quarters.
- Domestic demand remained the main engine of growth, supported by rising employment and wages.
- In most CESEE countries, expansion remained robust thanks to higher absorption of EU funds and strong private consumption growth.
- Several economies showing signs of softening include Romania, Turkey, and the United Kingdom.
- Confidence indicators have declined to pre-2017 levels, and forward-looking indicators suggest moderation of growth.

### External and Commodity Headwinds
- The external environment has become less supportive: slowing global demand, escalating trade disputes, and higher fuel prices.
- Global imports of European goods and services grew by 7.5 percent in 2017, up from 3 percent a year earlier; foreign demand for European exports moderated in 2018 and is expected to remain soft in 2019.
- Exports slowdown in the euro area is driven by intermediate and capital goods, which account for two-thirds of goods exports from the euro area to the rest of the world.
- Some of the 2018 Q3 slowdown reflects lower car production as carmakers adapt to comply with new pollution tests.
- Commodity prices have increased 7 percent since the spring of 2018; oil prices climbed to $79 a barrel in September, the highest level since 2014.
- The increase in fuel prices has lifted headline inflation by an average of about ½ percentage point across Europe.
- For Norway and Russia, the terms-of-trade windfall gains are estimated at about 1.5 percent of GDP each year.
- In the rest of Europe, higher fuel prices have dampened real disposable incomes by up to 0.7 percentage point of GDP, a worsening of about a third of a percentage point of GDP compared with the April 2018 World Economic Outlook estimates.
- The increase in fuel prices is expected to further strengthen current account surpluses for oil exporters.

### Domestic Constraints and Financial Conditions
- Output gaps are estimated to be mostly closed or positive; production capacity constraints and labor shortages are becoming more binding, mostly in emerging Europe and in selected advanced economies.
- In several CESEE countries, wage growth exceeded 10 percent annually in the first half of 2018.
- Wage growth has moved upward in the euro area, but much more slowly than in CESEE countries.
- Bank credit to the private sector is growing at moderate rates, but signs of asset price overvaluations are present in selected housing markets (for example, the Czech Republic and some of the Nordics).
- Policy rates have been adjusted upward in some economies to offset inflationary impacts from exchange rate depreciation (Turkey, Russia) and high wage growth (Czech Republic, Romania).
- Core inflation has remained low in most countries, with the notable exception of Turkey.
- Financial conditions tightened somewhat, especially in vulnerable countries:
  - In Turkey, policy credibility concerns and geopolitical tensions contributed to a sharp lira depreciation by about 40 percent since the beginning of the year.
  - In Italy, sovereign bond yields jumped to a four-year high due to difficulties in forming a government and policy uncertainties.
- So far, spillovers have been fairly contained, but contagion from future stress could be notable for economies with weaker fundamentals and limited policy buffers.

### Outlook, Revisions, and Inflation
- Real GDP growth in Europe is expected to moderate but remain above potential in most countries.
- Growth has been revised downward in about half of the countries compared with May 2018 projections, mainly reflecting weaker external demand and higher energy prices.
- Revisions and notable country changes:
  - Advanced Europe: growth revised down by 0.3 percentage point in 2018 and 0.1 percentage points in 2019 versus the previous forecast.
  - Germany: 2018 growth downward revision of 0.6 percentage point.
  - Emerging Europe excluding Turkey: growth projections unchanged in 2018 and revised up by 0.2 percentage point in both 2019 and 2020.
  - Macedonia, Romania, and Turkey: large downgrades of about 1 percentage point each in 2018.
  - Turkey: growth expected to weaken from 3.5 percent in 2018 to 0.4 percent in 2019 before recovering in 2020.
- Inflation outlook:
  - Headline inflation is expected to increase across European countries on the back of higher energy prices and positive output gaps.
  - Advanced Europe: inflation revised up by 0.1 percentage point in both 2018 and 2019 to 1.8 percent.
  - Emerging Europe: revisions of 0.8 percentage point in 2018 and 2 percentage points in 2019, primarily reflecting Turkey’s worsened inflation outlook.
  - In 2019, a pickup in inflation is expected in Russia due to the increase in the main value-added-tax rate and additional debt-financed infrastructure spending.

### Downside Risks and Scenarios
- The balance of risks is tilted to the downside in both the short term and beyond.
- Key risk factors:
  - Escalating trade tensions and a potential shift away from a multilateral, rules-based trading system could disrupt supply chains and weigh on growth, especially given Europe’s trade openness and deep integration into global value chains.
  - A sharp tightening in global financial conditions would expose existing vulnerabilities and could trigger contagion to weaker economies.
  - The possibility of a “no-deal” Brexit raises the risk of a disruptive exit and high trade and nontrade barriers between the United Kingdom and the rest of the European Union.
  - Medium-term risks include shifts to unsustainable macroeconomic policies, delays in structural reforms, demographic challenges, rising inequality, and declining trust in mainstream policies.

### Policy Priorities and Recommendations
- Fiscal policy:
  - Scale back procyclical fiscal stances prevailing in many European countries.
  - Use the opportunity of above-potential growth and low unemployment to reduce high levels of public debt and rebuild fiscal buffers.
  - Countries with significant vulnerabilities (such as Italy and Turkey) should prioritize measures to reduce fiscal deficits toward medium-term targets and lower debt.
  - Countries with ample fiscal space and stronger external positions (Germany, Netherlands) should use available space to raise potential output through more public investment and promote external rebalancing.
- Monetary policy:
  - In emerging Europe where core inflation has picked up, central banks should gradually normalize monetary policy in a well-communicated manner.
  - In advanced Europe where underlying inflation pressures remain subdued, monetary policy should remain supportive to ensure durable increases in inflation toward targets.
  - In the euro area, as asset purchases come to an end, forward guidance on interest rates becomes more important to keep policy rates at current, extraordinarily low levels at least through next summer.
- Financial sector policies:
  - Use targeted macroprudential measures to address specific financial stability risks; borrower-based measures can help contain the share of high-risk loans.
  - Continue cleaning bank balance sheets, including reduction in nonperforming loans.
  - Monitor increased corporate debt in the euro area, especially among lower-rated companies.
- Structural reforms to boost potential growth:
  - Implement policies to boost labor force participation and foster higher potential growth.
  - Advanced Europe: further reforms of labor and product markets to boost competitiveness and improve productivity.
  - Emerging Europe: enhance institutions, improve the investment environment, and boost labor participation by women and the elderly.
  - Russia: improve the investment climate, boost infrastructure investment and human capital, and improve goods market efficiency.
- Euro area architecture:
  - Implement reforms to further reduce risks and improve risk sharing, including completing the banking union and advancing the capital markets union.
  - Develop a central fiscal capacity that supports macroeconomic stabilization with strong safeguards, and revamp fiscal rules to make them simpler and easier to enforce.
- Trade policy:
  - An agreement that minimizes the introduction of new tariff and nontariff barriers would best protect growth and income in the United Kingdom and the EU.
  - The European Union and its partners should work constructively to reduce trade barriers and resolve disagreements through the World Trade Organization whenever possible.

*International Monetary Fund | November 2018 — Chapter reflects data and developments as of October 15, 2018.*

### GDP Growth (Year-over-year percent change) — Selected aggregates and country highlights
- Europe: 2.8 2.3 1.9 1.9 (October 2018 WEO); 2.6 2.2 2.0 (April 2018 WEO); 0.3 0.3 0.0 (Difference)
- Advanced European Economies: 2.4 2.0 1.9 1.7 (October 2018 WEO); 2.3 2.0 1.7 (April 2018 WEO); 0.3 0.2 0.0 (Difference)
- Euro Area: 2.4 2.0 1.9 1.7 (October 2018 WEO); 2.4 2.0 1.7 (April 2018 WEO); 0.4 0.1 0.0 (Difference)

- Selected country projections (October 2018 WEO; April 2018 WEO; Difference):
  - Germany: 2.5 1.9 1.9 1.6; 2.5 2.0 1.5; 0.6 0.2 0.1
  - Italy: 1.5 1.2 1.0 0.9; 1.5 1.1 0.9; 0.4 0.2 0.0
  - Spain: 3.0 2.7 2.2 1.9; 2.8 2.2 1.9; 0.1 0.0 0.0
  - United Kingdom: 1.7 1.4 1.5 1.5; 1.6 1.5 1.5; 0.3 0.0 0.0
  - Turkey: 7.4 3.5 0.4 2.6; 4.4 4.0 3.6; 0.9 2.3 2.1 0.0
  - Romania: 6.9 4.0 3.4 3.3; 5.1 3.5 3.1; 2.1 0.1 0.2

- Regional aggregates (October 2018 WEO):
  - Emerging European Economies: 3.8 2.9 2.0 2.4
  - Central Europe: 4.5 4.3 3.5 2.9
  - Eastern Europe: 1.7 2.0 1.9 1.9
  - Southeastern European EU Member States: 5.7 3.7 3.3 3.0

- Memorandum (October 2018 WEO; April 2018 WEO; Difference):
  - World: 3.7 3.7 3.7 3.7; 3.9 3.9 3.8; 0.2 0.3 0.1
  - Advanced economies: 2.3 2.4 2.1 1.7; 2.5 2.2 1.7; 0.1 0.2 0.1 0.0
  - Emerging market and developing economies: 4.7 4.7 4.7 4.9; 4.9 5.1 5.1; 0.3 0.4 0.2 0.1
  - European Union: 2.7 2.2 2.0 1.8; 2.5 2.1 1.8; 0.3 0.2 0.1 0.0
  - United states: 2.2 2.9 2.5 1.8; 2.9 2.7 1.9; 0.0 0.1 0.0
  - China: 6.9 6.6 6.2 6.2; 6.6 6.4 6.3; 0.0 0.2 0.0
  - Japan: 1.7 1.1 0.9 0.3; 1.2 0.9 0.3; 0.1 0.0 0.0

*sources: IMF, World Economic Outlook (WEO); and IMF staff calculations. Numbers in this column may differ from the difference between October and April projections due to rounding.*

### Section 1

### 1. Domestic Expansion Running into External Turbulence

### Recent Activity and Growth Developments
- Activity continued to expand in the first half of 2018, but at a slower-than-expected pace, mainly in advanced Europe.
- Growth is now projected to slow from 2.8 percent in 2017 to 2.3 percent in 2018 and 1.9 percent in 2019, down from respective projections of 2.6 percent and 2.2 percent in the May 2018 Regional Economic Outlook: Europe.
- In the euro area, GDP growth cooled to 0.2 percent in the third quarter (quarter-on-quarter, annual rate), from 0.4 percent in each of the first two quarters.
- Domestic demand remained the main engine of growth, supported by rising employment and wages.
- In most CESEE countries, expansion remained robust thanks to higher absorption of EU funds and strong private consumption growth.
- Several economies showing signs of softening include Romania, Turkey, and the United Kingdom.
- Confidence indicators have declined to pre-2017 levels, and forward-looking indicators suggest moderation of growth.

### External and Commodity Headwinds
- The external environment has become less supportive: slowing global demand, escalating trade disputes, and higher fuel prices.
- Global imports of European goods and services grew by 7.5 percent in 2017, up from 3 percent a year earlier; foreign demand for European exports moderated in 2018 and is expected to remain soft in 2019.
- Exports slowdown in the euro area is driven by intermediate and capital goods, which account for two-thirds of goods exports from the euro area to the rest of the world.
- Some of the 2018 Q3 slowdown reflects lower car production as carmakers adapt to comply with new pollution tests.
- Commodity prices have increased 7 percent since the spring of 2018; oil prices climbed to $79 a barrel in September, the highest level since 2014.
- The increase in fuel prices has lifted headline inflation by an average of about ½ percentage point across Europe.
- For Norway and Russia, the terms-of-trade windfall gains are estimated at about 1.5 percent of GDP each year.
- In the rest of Europe, higher fuel prices have dampened real disposable incomes by up to 0.7 percentage point of GDP, a worsening of about a third of a percentage point of GDP compared with the April 2018 World Economic Outlook estimates.
- The increase in fuel prices is expected to further strengthen current account surpluses for oil exporters.

### Domestic Constraints and Financial Conditions
- Output gaps are estimated to be mostly closed or positive; production capacity constraints and labor shortages are becoming more binding, mostly in emerging Europe and in selected advanced economies.
- In several CESEE countries, wage growth exceeded 10 percent annually in the first half of 2018.
- Wage growth has moved upward in the euro area, but much more slowly than in CESEE countries.
- Bank credit to the private sector is growing at moderate rates, but signs of asset price overvaluations are present in selected housing markets (for example, the Czech Republic and some of the Nordics).
- Policy rates have been adjusted upward in some economies to offset inflationary impacts from exchange rate depreciation (Turkey, Russia) and high wage growth (Czech Republic, Romania).
- Core inflation has remained low in most countries, with the notable exception of Turkey.
- Financial conditions tightened somewhat, especially in vulnerable countries:
  - In Turkey, policy credibility concerns and geopolitical tensions contributed to a sharp lira depreciation by about 40 percent since the beginning of the year.
  - In Italy, sovereign bond yields jumped to a four-year high due to difficulties in forming a government and policy uncertainties.
- So far, spillovers have been fairly contained, but contagion from future stress could be notable for economies with weaker fundamentals and limited policy buffers.

### Outlook, Revisions, and Inflation
- Real GDP growth in Europe is expected to moderate but remain above potential in most countries.
- Growth has been revised downward in about half of the countries compared with May 2018 projections, mainly reflecting weaker external demand and higher energy prices.
- Revisions and notable country changes:
  - Advanced Europe: growth revised down by 0.3 percentage point in 2018 and 0.1 percentage points in 2019 versus the previous forecast.
  - Germany: 2018 growth downward revision of 0.6 percentage point.
  - Emerging Europe excluding Turkey: growth projections unchanged in 2018 and revised up by 0.2 percentage point in both 2019 and 2020.
  - Macedonia, Romania, and Turkey: large downgrades of about 1 percentage point each in 2018.
  - Turkey: growth expected to weaken from 3.5 percent in 2018 to 0.4 percent in 2019 before recovering in 2020.
- Inflation outlook:
  - Headline inflation is expected to increase across European countries on the back of higher energy prices and positive output gaps.
  - Advanced Europe: inflation revised up by 0.1 percentage point in both 2018 and 2019 to 1.8 percent.
  - Emerging Europe: revisions of 0.8 percentage point in 2018 and 2 percentage points in 2019, primarily reflecting Turkey’s worsened inflation outlook.
  - In 2019, a pickup in inflation is expected in Russia due to the increase in the main value-added-tax rate and additional debt-financed infrastructure spending.

### Downside Risks and Scenarios
- The balance of risks is tilted to the downside in both the short term and beyond.
- Key risk factors:
  - Escalating trade tensions and a potential shift away from a multilateral, rules-based trading system could disrupt supply chains and weigh on growth, especially given Europe’s trade openness and deep integration into global value chains.
  - A sharp tightening in global financial conditions would expose existing vulnerabilities and could trigger contagion to weaker economies.
  - The possibility of a “no-deal” Brexit raises the risk of a disruptive exit and high trade and nontrade barriers between the United Kingdom and the rest of the European Union.
  - Medium-term risks include shifts to unsustainable macroeconomic policies, delays in structural reforms, demographic challenges, rising inequality, and declining trust in mainstream policies.

### Policy Priorities and Recommendations
- Fiscal policy:
  - Scale back procyclical fiscal stances prevailing in many European countries.
  - Use the opportunity of above-potential growth and low unemployment to reduce high levels of public debt and rebuild fiscal buffers.
  - Countries with significant vulnerabilities (such as Italy and Turkey) should prioritize measures to reduce fiscal deficits toward medium-term targets and lower debt.
  - Countries with ample fiscal space and stronger external positions (Germany, Netherlands) should use available space to raise potential output through more public investment and promote external rebalancing.
- Monetary policy:
  - In emerging Europe where core inflation has picked up, central banks should gradually normalize monetary policy in a well-communicated manner.
  - In advanced Europe where underlying inflation pressures remain subdued, monetary policy should remain supportive to ensure durable increases in inflation toward targets.
  - In the euro area, as asset purchases come to an end, forward guidance on interest rates becomes more important to keep policy rates at current, extraordinarily low levels at least through next summer.
- Financial sector policies:
  - Use targeted macroprudential measures to address specific financial stability risks; borrower-based measures can help contain the share of high-risk loans.
  - Continue cleaning bank balance sheets, including reduction in nonperforming loans.
  - Monitor increased corporate debt in the euro area, especially among lower-rated companies.
- Structural reforms to boost potential growth:
  - Implement policies to boost labor force participation and foster higher potential growth.
  - Advanced Europe: further reforms of labor and product markets to boost competitiveness and improve productivity.
  - Emerging Europe: enhance institutions, improve the investment environment, and boost labor participation by women and the elderly.
  - Russia: improve the investment climate, boost infrastructure investment and human capital, and improve goods market efficiency.
- Euro area architecture:
  - Implement reforms to further reduce risks and improve risk sharing, including completing the banking union and advancing the capital markets union.
  - Develop a central fiscal capacity that supports macroeconomic stabilization with strong safeguards, and revamp fiscal rules to make them simpler and easier to enforce.
- Trade policy:
  - An agreement that minimizes the introduction of new tariff and nontariff barriers would best protect growth and income in the United Kingdom and the EU.
  - The European Union and its partners should work constructively to reduce trade barriers and resolve disagreements through the World Trade Organization whenever possible.

*International Monetary Fund | November 2018 — Chapter reflects data and developments as of October 15, 2018.*

### Section 2

### Section 2 — GDP Growth (Year-over-year percent change)

### Europe (aggregates)
- Europe: 2.8 2.3 1.9 1.9 (October 2018 WEO); 2.6 2.2 2.0 (April 2018 WEO); 0.3 0.3 0.0 (Difference)
- Advanced European Economies: 2.4 2.0 1.9 1.7 (October 2018 WEO); 2.3 2.0 1.7 (April 2018 WEO); 0.3 0.2 0.0 (Difference)
- Euro Area: 2.4 2.0 1.9 1.7 (October 2018 WEO); 2.4 2.0 1.7 (April 2018 WEO); 0.4 0.1 0.0 (Difference)

### Advanced European Economies — selected country growth rates (October 2018 WEO; April 2018 WEO; Difference)
- Austria: 3.0 2.8 2.2 1.6; 2.6 2.0 1.5; 0.2 0.2 0.0
- belgium: 1.7 1.5 1.5 1.5; 1.9 1.7 1.5; 0.4 0.2 0.0
- Cyprus: 3.9 4.0 4.2 3.3; 3.6 3.0 2.6; 0.4 1.3 0.7
- Estonia: 4.9 3.7 3.2 3.0; 3.9 3.2 3.0; 0.2 0.0 0.1
- Finland: 2.8 2.6 1.8 1.6; 2.6 2.0 1.5; 0.1 0.2 0.1
- France: 2.3 1.6 1.6 1.6; 2.1 2.0 1.8; 0.5 0.4 0.2
- Germany: 2.5 1.9 1.9 1.6; 2.5 2.0 1.5; 0.6 0.2 0.1
- Greece: 1.4 2.0 2.4 2.2; 2.0 1.8 1.8; 0.0 0.5 0.4
- Ireland: 7.2 4.7 4.0 3.5; 4.5 4.0 3.5; 0.2 0.0 0.1
- Italy: 1.5 1.2 1.0 0.9; 1.5 1.1 0.9; 0.4 0.2 0.0
- Latvia: 4.5 3.7 3.3 3.1; 4.0 3.5 3.3; 0.2 0.2 0.2
- Lithuania: 3.9 3.5 2.9 2.7; 3.2 3.0 2.8; 0.4 0.1 0.0
- Luxembourg: 2.3 4.0 3.5 3.3; 4.3 3.7 3.3; 0.3 0.2 0.0
- Malta: 6.7 5.7 4.6 4.0; 5.7 4.6 4.0; 0.0 0.0 0.0
- Netherlands: 2.9 2.8 2.6 2.3; 3.2 2.4 2.1; 0.4 0.2 0.2
- portugal: 2.7 2.3 1.8 1.5; 2.4 1.8 1.5; 0.1 0.0 0.0
- slovak Republic: 3.4 3.9 4.1 3.8; 4.0 4.2 3.8; 0.1 0.2 0.0
- slovenia: 5.0 4.5 3.4 2.8; 4.0 3.2 2.7; 0.5 0.2 0.1
- spain: 3.0 2.7 2.2 1.9; 2.8 2.2 1.9; 0.1 0.0 0.0

### Nordic Economies
- Nordic Economies: 2.1 2.2 2.1 1.9; 2.3 2.1 2.0; 0.1 0.0 0.0
- Denmark: 2.3 2.0 1.9 1.8; 2.0 1.9 1.8; 0.0 0.0
- Iceland: 4.0 3.7 2.9 2.8; 3.2 3.0 2.8; 0.5 0.1 0.0
- Norway: 1.9 2.1 2.1 1.9; 2.1 2.1 1.9; 0.0 0.0 0.0
- sweden: 2.1 2.4 2.2 2.0; 2.6 2.2 2.1; 0.2 0.0 0.0

### Other European Advanced Economies — selected
- Other European Advanced Economies: 2.0 1.9 1.8 1.8; 2.0 1.9 1.8; 0.1 0.0 0.0
- Czech Republic: 4.3 3.1 3.0 2.5; 3.5 3.0 2.5; 0.5 0.0 0.0
- Israel: 3.3 3.6 3.5 3.3; 3.3 3.5 3.0; 0.1 0.3
- san Marino: 1.9 1.4 1.0 0.8; 1.3 1.3 1.3; 0.1 0.3 0.2
- switzerland: 1.7 3.0 1.8 1.7; 2.3 2.0 1.9; 0.7 0.2
- United Kingdom: 1.7 1.4 1.5 1.5; 1.6 1.5 1.5; 0.3 0.0 0.0

### Emerging European Economies (aggregates)
- Emerging European Economies: 3.8 2.9 2.0 2.4; 3.1 2.7 2.5; 0.2 0.7 0.1

### Central Europe
- Central Europe: 4.5 4.3 3.5 2.9; 4.0 3.4 2.9; 0.3 0.0 0.0
- Hungary: 4.0 4.0 3.3 2.6; 3.8 3.0 2.6; 0.2 0.3 0.0
- poland: 4.6 4.4 3.5 3.0; 4.1 3.5 3.0; 0.3 0.0 0.0

### Eastern Europe
- Eastern Europe: 1.7 2.0 1.9 1.9; 1.9 1.7 1.7; 0.1 0.3 0.2
- belarus: 2.4 4.0 3.1 2.5; 2.8 2.4 2.0; 1.1 0.6 0.5
- Moldova: 4.5 3.8 3.8 3.8; 3.5 3.8 3.8; 0.2 0.0 0.0
- Russia: 1.5 1.7 1.8 1.8; 1.7 1.5 1.5; 0.0 0.3 0.3
- Ukraine: 2.5 3.5 2.7 3.0; 3.2 3.3 3.5; 0.3 0.5 0.4

### Southeastern Europe — EU Member States
- Southeastern European EU Member States: 5.7 3.7 3.3 3.0; 4.5 3.3 3.0; 0.8 0.0 0.1
- bulgaria: 3.6 3.6 3.1 2.8; 3.8 3.1 2.8; 0.2 0.0 0.0
- Croatia: 2.8 2.8 2.6 2.4; 2.8 2.6 2.4; 0.0 0.0 0.0
- Romania: 6.9 4.0 3.4 3.3; 5.1 3.5 3.1; 2.1 0.1 0.2

### Southeastern Europe — Non-EU Member States
- Southeastern European Non-EU Member States: 2.4 3.5 3.4 3.7; 3.4 3.5 3.8; 0.1 0.0 0.0
- Albania: 3.8 4.0 3.7 3.9; 3.7 3.8 3.9; 0.3 0.1 0.0
- bosnia and Herzegovina: 3.0 3.2 3.5 3.7; 3.2 3.5 3.7; 0.0 0.0 0.0
- Kosovo: 3.7 4.0 4.0 4.0; 4.0 4.0 4.0; 0.0 0.0 0.0
- Macedonia, FYR: 0.0 1.6 2.6 2.8; 2.8 3.0 3.2; 1.2 0.4 0.4
- Montenegro: 4.3 3.7 2.5 3.0; 3.1 2.4 3.0; 0.6 0.1 0.0
- serbia: 1.9 4.0 3.5 4.0; 3.5 3.5 4.0; 0.5 0.0 0.0
- Turkey: 7.4 3.5 0.4 2.6; 4.4 4.0 3.6; 0.9 2.3 2.1 0.0

### Memorandum
- World: 3.7 3.7 3.7 3.7; 3.9 3.9 3.8; 0.2 0.3 0.1
- Advanced economies: 2.3 2.4 2.1 1.7; 2.5 2.2 1.7; 0.1 0.2 0.1 0.0
- Emerging market and developing economies: 4.7 4.7 4.7 4.9; 4.9 5.1 5.1; 0.3 0.4 0.2 0.1
- European Union: 2.7 2.2 2.0 1.8; 2.5 2.1 1.8; 0.3 0.2 0.1 0.0
- United states: 2.2 2.9 2.5 1.8; 2.9 2.7 1.9; 0.0 0.1 0.0
- China: 6.9 6.6 6.2 6.2; 6.6 6.4 6.3; 0.0 0.2 0.0
- Japan: 1.7 1.1 0.9 0.3; 1.2 0.9 0.3; 0.1 0.0 0.0

*sources: IMF, World Economic Outlook (WEO); and IMF staff calculations. Numbers in this column may differ from the difference between October and April projections due to rounding.*

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_Source: https://www.imf.org/-/media/files/publications/reo/eur/2018/november/eur-reo-ch1.pdf_