The global economic recovery is expected to continue and accelerate slightly, with the IMF’s World Economic Outlook projecting 3.7% global growth for 2018, slightly higher than the growth rate of 3.6% in 2017. However, rising interest rates and less easy access to financing could start to impair solvency in countries that are highly indebted. Another important factor that has an impact on the global outlook is China. After a better-than-expected growth performance in 2017, Chinese economic growth is expected to gradually slow down again in 2018, as Beijing continues its targeted tightening and (financial) deleveraging. A slowing and tightening China is expected to have an impact on trade and economic activity worldwide, while countries with a higher-than-average dependence on Chinese import demand would be hit particularly hard. In terms of currencies, most analysts think the weakening trend of the US dollar against the euro could continue despite US monetary tightening. This would be due to, among other things, US political uncertainty and the European Central Bank ending its quantitative easing, which could strengthen the euro.

Addressing basic needs through innovation

The inclusive finance market has seen significant progress. More people have gained access to the financial system and the financial sector in many countries has matured. Partly in view of the recognition that financial inclusion is an enabler to achieve the SDGs, the market is expected to continue its progress. Growth will vary in different markets across the regions, due to different stages of market development, economic growth, demographic conditions, and technological progress. While continuing to work with financial institutions that serve the traditionally underserved clients, the fund also expects to enter into more partnerships with financial institutions that offer innovative solutions that provide for basic needs, such as housing, education, and healthcare.

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