Euromonitor International is pleased to provide our blog readers with the executive summary of our new macroeconomic outlook Global Economic Forecasts: Q1 2017.
Despite the risk of stronger trade and immigration restrictions and greater policy uncertainty after Donald Trump took the Presidential office, the reaction of financial markets has been more optimistic than expected. In this context, we have revised the world GDP growth forecast up to 3.3% in 2017 and 3.4% in 2018.
- However, the global economy remains vulnerable to Trump potentially changing the rules of the game at a time when it is already fragile.
- Europe has witnessed the growing strength of populist anti-EU parties, especially in France and Italy, which increases risks of possible EU exits and negative shocks to financial markets and private sector confidence.
- China is confronting excessive credit growth and a difficult economic rebalancing process. Meanwhile, Russia and Brazil are struggling to grow due to a lack of tangible stimulus for domestic demand, and ongoing structural problems. Along with deteriorating international trade environment and deceleration in capital inflows, this extends the risk of a major slowdown across emerging economies.
The two main global risk scenarios remain Advanced Economies stagnation and Emerging Markets slowdown. Each of these scenarios would cause a decrease in the global real GDP growth to around 2.5% in 2017 and to 1.8% in 2018.
