Global growth is projected to strengthen in the short-term supported by positive business and consumer confidence and expectations of stronger profitability. The higher growth may speed up exit from unconventional monetary policies in the advanced countries.
Although global financing conditions remain favourable, the strengthening of the US dollar, rising oil prices and US long-term yields are beginning to exert pressures on emerging and frontier market currencies.
On the domestic front, economic activity remained strong as non-oil growth continued to show signs of a rebound following the slowdown in the last few years. In the first quarter of 2018, the Bank’s Composite Index of Economic Activity, which is a leading indicator, showed some moderation.
However, the latest business and consumer confidence surveys indicated continued optimism based on improving macroeconomic fundamentals and realization of expectations, despite lingering concerns on employment opportunities by consumers.
