Euromonitor International is pleased to provide our blog readers with the executive summary of our new economic outlook Global Economic Forecasts: Q4 2016.
The victory of Donald Trump in the US presidential elections is another political shock to the economies of the developed world. After initial downward movements, global stock markets rebounded and even increased in the first week after Trump’s election.
- For now, US financial markets seem to have taken a benign view of the economic impact of Trump’s policies, focusing on expectations of a short-term fiscal stimulus. The real impact of the new leadership to the fundamentals of the US economy will show once some new policies start to be implemented. It is hard to predict what president Trump will actually be willing and able to accomplish. Yet, based on the pre-elections promises of Mr. Trump, the risks are downward. In light of the elections results, we have revised our forecasts of world GDP growth to 2.8% in 2017 and 3.1% in 2018.
- Continuing uncertainty about the implementation of Brexit adds to the vulnerability of the developed economies. 2017 is also the year of general elections in France and Germany. So, new challenges, such as the National Front party of Marine Le Pen in France and political forces gaining popularity from increasing antirefugee sentiment in Germany, are awaiting Europe.
- Brazil and Russia have been showing signs of rebound after the recession, while emerging Asia and India in particular are exhibiting solid growth. In addition, commodity prices, in particular oil and coal, have firmed over the last few months, easing pressure on commodity exporters – although some of the emerging markets still face the challenge of adjusting to historically weaker commodity prices.