State of the global economy going into 2017 – Danske Bank
|Research Team at Danske Bank, suggests that we are seeing the strongest recovery of the global economy since 2013 and this time, the recovery is shared across different regions for the first time in a long time, as both developed and key emerging markets are getting on a stronger footing.
Key Quotes
“Another feature is that the recovery is being driven not only by private consumption but is also likely to be lifted by higher global investment activity, rebounding from the very weak levels observed over the past few years.”
“As a result, we have revised our global growth outlook slightly higher in 2017. Due to a small lift in the US and euro area forecasts, we now forecast global growth at 3.5%, up from 3.4%. While Trump’s fiscal easing will have a growth impact, we do not (against consensus) think the economy will benefit until late 2017 at the earliest and mostly in 2018. In China, real GDP growth is likely to slow somewhat in 2017 after staging a fairly strong recovery in 2016. Stimulus measures are fading and we think that concerns about the debt levels will become more prominent, adding to pressures on the renminbi. Then we have some of the most battered emerging markets, which are starting to show sign of life again, such as Russia and Brazil, after frosty years of deep recessions.”
“The key risks next year are political, in our view. This is certainly the case in Europe, where the outcome of elections in major countries (starting with the referendum in Italy on Sunday and the presidential election rerun in Austria) is fairly uncertain. We still need to see the exact policy framework the new Trump administration will come up with.”
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