Analysts at NAB explain that the global economic upturn has ridden out geo-political shocks coming from Brexit and the risk of US policy U-turns in the wake of President Trump’s election victory.
“The latest business surveys show very positive sentiment across the big advanced economies, recent data on global industrial output and trade shows the upturn continuing into 2017 and fear of global deflation has gone as modest price pressure returns. The main disappointment has been the big emerging economies which are key drivers of commodity demand. Central banks appear more relaxed about the outlook, with the period of maximum policy stimulus probably now behind us as the US Fed focuses on gradually lifting interest rates and the others see little need to take any new measures to boost demand.”
“Politics still presents the main risk to our forecast acceleration in global growth from 2016’s 3% rate to around 3½% by 2018 with the focus shifting to the series of elections due in Western Europe through the next year, especially those in France and Italy where anti-Euro populist parties have been polling strongly.”
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