By: Noha El Nahas  

                                                            

Mubasher: While global economy grows with better inflation rates, central banks decided to raise interest rates and reduce incentives.

The World Bank increased its estimations regarding the economic growth in 2017 and 2018 on the back of the recovery in Euro area, Japan, and Asian emerging markets.

 

The United States                                                                  

The Fed announced a plan to cut its budget in the coming three or four years to a range between $2.5 trillion and $3 trillion.

Encouraged by the 3.3% growth in the US’ gross domestic product (GDP) during the third quarter of 2017, the Fed raised the interest rates three times in 2017: in March, June, and December, bringing it to a range between 1.25% and 1.5%.

 

Canada

Canada’s central bank also raised the interest rates twice in 2017, after seven years of stabilisation.

The central bank rose the rates to 0.25% in July and 1% in September, on the back of the 1.7% increase in the Canadian economy growth.

 

England, South Korea, Euro area

This policy resonated in many countries, including England and South Korea, whose interest rates reached 0.5% and 1.5%, respectively.

On the other hand, the European Central Bank did not join that trend, while the Euro area achieved a growth of 0.6% quarter-on-quarter in the third quarter of 2017.

 

Japan

Japan also did not change the interest rate or take actual measures to change its monetary policy; however, its central bank thinks that it is not likely that any easing-related decisions would be taken.

Japan’s inflation rate rose 0.7%, while the GDP added 1.4% in the third quarter of 2017.

 

Translated by: Muhammad Khalid