In the new normal, 2.7% global GDP growth is a blockbuster success. That’s where we are heading in 2017, according to the latest assessment by the World Bank.
The outlook is bright, but not brilliant.
“For too long, we’ve seen low growth hold back progress in the fight against poverty, so it is encouraging to see signs that the global economy is gaining firmer footing,” World Bank Group President Jim Yong Kim said. He tried to be excited, but the reality is that the United States is not going to grow anymore under Trump than it did under Obama (it might even grow less) and China growth is slowing.
See: Global Economic Prospects – A Fragile Recovery
“Countries must continue to invest in people and build resilience against overlapping challenges, including climate change, conflict, forced displacement, famine, and disease,” said Kim.
For Wall Street, the real problem in the U.S. is corporate taxes and ongoing gridlock in Washington leading to fiscal policy uncertainty.
Private consumption moderated in early 2017, despite strong consumer confidence. Private investment strengthened, whereas capital expenditures in the energy sector showed signs of bottoming out. Economic slack is diminishing, but unused capacity remains above pre-crisis levels in the U.S.
The report, released June 4, points to a pick-up in manufacturing and trade, and stabilizing commodity prices as reasons for the positive outlook on growth. The World Bank highlights new trade restrictions and persistent policy uncertainty as future wet blankets.
Meanwhile, monetary policy normalization could also increase financial turbulence, mainly in the euro zone where banks there have grown accustomed to negative interest rates.
Later in the week, the OECD will deliver its global economic forecast. They too are likely to give a cautiously upbeat assessment on the recovery. One takeaway from the World Bank is that growth leadership is rotating away from the U.S. and into Europe and Asia, which should at least keep the global growth outlook positive. World Outlook Bright, But Not Brilliant
In the new normal, 2.7% global GDP growth is a blockbuster success. That’s where we are heading in 2017, according to the latest assessment by the World Bank.
The outlook is bright, but not brilliant.
“For too long, we’ve seen low growth hold back progress in the fight against poverty, so it is encouraging to see signs that the global economy is gaining firmer footing,” World Bank Group President Jim Yong Kim said. He tried to be excited, but the reality is that the United States is not going to grow anymore under Trump than it did under Obama (it might even grow less) and China growth is slowing.
See: Global Economic Prospects – A Fragile Recovery
“Countries must continue to invest in people and build resilience against overlapping challenges, including climate change, conflict, forced displacement, famine, and disease,” said Kim.
For Wall Street, the real problem in the U.S. is corporate taxes and ongoing gridlock in Washington leading to fiscal policy uncertainty.
Private consumption moderated in early 2017, despite strong consumer confidence. Private investment strengthened, whereas capital expenditures in the energy sector showed signs of bottoming out. Economic slack is diminishing, but unused capacity remains above pre-crisis levels in the U.S.
The report, released June 4, points to a pick-up in manufacturing and trade, and stabilizing commodity prices as reasons for the positive outlook on growth. The World Bank highlights new trade restrictions and persistent policy uncertainty as future wet blankets.
Meanwhile, monetary policy normalization could also increase financial turbulence, mainly in the euro zone where banks there have grown accustomed to negative interest rates.
Later in the week, the OECD will deliver its global economic forecast. They too are likely to give a cautiously upbeat assessment on the recovery. One takeaway from the World Bank is that growth leadership is rotating away from the U.S. and into Europe and Asia, which should at least keep the global growth outlook positive.