Global Economy: Shifting sands - Westpac

According to the analysts at Westpac, the prospects for the global economy are looking a bit brighter in 2017, although the outlook is marred with uncertainty – especially the path of US fiscal and trade policy.

Key Quotes

“While there are upsides if the Trump administration is successful in promoting growth, this is countered by the risk of potential deterioration in the global trade environment.”

“The outlook for the global economy is looking a bit brighter, with growth this year and next expected to pick up a touch to 3.5%. And with commodity prices and global inflation comfortably up from their troughs, central bankers around the world will be breathing a little easier as the strong disinflationary impulse has largely passed.”

“But the global economy is not out of the woods yet. In many countries, record levels of monetary stimulus continue to play an important role in propping up demand. And there’s a lot clouding the outlook. At the forefront is the path for US fiscal and trade policy as the Trump administration gets its feet under the table, but simmering away in the background is political uncertainty in Europe, with elections this year in France, the Netherlands and Germany, while the United Kingdom is expected to formally begin negotiations to exit the European Union.”