Global Economic Forecasts: Q3 2017

Strategy Briefing

About This Report

Aug 2017

The global economy has started 2017 strong with real GDP growth reaching 3.6% year-on-year in 2017 Q1. We have maintained our world GDP growth forecasts at 3.5% for 2017-2018. The economic activity is estimated to accelerate in both advanced and emerging economies, reaching 2.0% and 4.7% growth, respectively, in 2017. The uncertainty surrounding the global forecast has somewhat receded. Some of the most important risks are stemming from the US policies, Brexit negotiations, and China slowdown.

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Global Economic Forecasts: Q3 2017

Global Economy OVERVIEW

The global economy has started 2017 strong with real GDP growth gaining momentum and rising to 3.6% in 2017 Q1. We have maintained our global real GDP growth forecast at 3.5% for 2017-2018.

Despite standing above the annual 3.2% growth in 2016, the forecast is still considerably below the pre-crisis growth levels. The economic activity is forecast to accelerate in both advanced and emerging economies, reaching 2.0% and 4.7% growth, respectively, in 2017.

Emerging markets growth

Emerging markets however, will remain a principal driver of the global economic growth, accounting for as much as 74% of the world’s real GDP expansion. This share is predicted to surge further up to 79% in 2020. The uncertainty surrounding the global growth forecast has somewhat receded since May 2017.

Political Risks

The political risks have diminished in Europe, with the region rebounding more strongly than expected.The populist parties have performed worse than expected in a number of Eurozone elections, which suggests that the populist surge might begin to fade.

Unexpected US policies

Some of the most urgent global risks presently are stemming from the unexpected US policies, rising geopolitical tensions, uncertain outcome of Brexit negotiations, or the possibility of sharper than estimated China growth slowdown.

These changes could complicate the macroeconomic situation in major economies with negative spill-overs to other countries and result in damage to their private confidence,investments and overall economic growth.

Overview

Global Economy
Executive Summary
GDP Forecasts – Revisions Over Last Quarter
Inflation Forecasts - Revisions Over Last Quarter
Interest Rate Forecast
Major Forecast Revisions

The US

General Outlook
Pessimistic and Optimistic Scenarios
Consumer Spending and Labour Markets
Private Sector Sentiment and Business Investment
Financial Markets
Interest Rates and Inflation

The Eurozone

General Outlook
Pessimistic and Optimistic Scenarios
Consumption and Investment
Labour Markets and Productivity
Financial Markets and Monetary Policy

The UK

GDP and General Outlook
Pessimistic and Optimistic Scenario
Inflation and Monetary Policy
Private Sentiment and Consumer Spending

Japan

Economic Activity
Pessimistic and Optimistic Scenario
Labour Market

China

General Outlook
Pessimistic and Optimistic Scenarios
Output and Economic Activity
Financial Markets and Monetary Policy

Russia

GDP Growth and Production
Pessimistic and Optimistic Scenario
GDP Components
Income, Inflation and Exchange Rate

Brazil

Economic Activity and Inflation
Pessimistic and Optimistic Scenario
Political Situation and Fiscal Balance
Labour Market Reform

India

GDP and Industrial Production
Pessimistic and Optimistic Scenario
Business Conditions and Tax Reform
Interest Rates and Inflation

Risk Scenarios

Global Risk Scenarios
Scenario Descriptions
Scenario News

Notes

Scope and Objectives
Definitions