Global Economic Forecasts: Q3 2016 – Executive Summary

Euromonitor International is pleased to provide our blog readers with the executive summary of our new economic outlook Global Economic Forecasts: Q3 2016.

The global economy was already not in the best shape, and recent political events in developed economies have caused additional risks. The Brexit vote has worsened the outlook for the UK and the EU in the time of major structural problems of European banks, already high geopolitical tensions, increased terrorism threats and the on-going refugee crisis.

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  • The negative impact of the Brexit vote and slow growth in the US have led us to revise the global growth projection slightly downwards for 2016–2017.
  • The upcoming US election will be another major political challenge. The possibility of Donald Trump victory places a risk to the US economy and would further weaken the economic outlook of the developed countries in general. We estimate that due to Trump victory increased uncertainty and financial shocks would lead to US GDP Growth declining to 0.4% in 2017 and 0.8% in 2018.
  • Although global interest rates remain at historically low levels, investment growth has been declining in most of the major economies due to low business confidence and higher uncertainty. Business investment has declined in the US and the UK. Both China and India also experienced a significant slowdown in investment growth during the last two quarters. This negative trend affects not only the current economic growth, but also the productivity growth and economic potential for the future.

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