According to the latest Fitch Ratings' Global Economic Outlook (GEO) report, the recovery in global growth is strengthening and is expected to pick up to 2.9% this year and peak at 3.1% in 2018, the highest rate since 2010.
- Faster growth this year reflects a synchronised improvement across both advanced and emerging market economies
- The biggest positive forecast revision since Fitch's March GEO is to the eurozone
- stronger incoming data, improving external demand and greater confidence that ECB QE is gaining traction on activity have resulted in an upward revision of 0.3pps to the 2017 eurozone growth forecast, taking it to 2%
- With the Fed now signalling that QE will start to be unwound later this year, these monetary policy adjustments could spark some volatility in global financial markets attuned to persistent monetary accommodation
- The two key downside risks identified last quarter - eurozone fragmentation risk and aggressive US-led protectionism - have not gone away but have certainly diminished somewhat in recent months
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