What Does 2017 Hold For The Global Economy?

global world map

The IMF World Economic Outlook estimates global growth will grow from 3.1 percent in 2016 to 3.4 percent in 2017. The IMF have slightly marked down 2017 growth prospects for advanced economies while marking up those in the rest of the world.

The Organisation for Economic Cooperation and Development (OECD) and the UN Conference on Trade and Development (Unctad) reports looking at 2017 suggest that Brexit Britain will have a challenging year and suggests the global economy is on the verge of “entering a third phase of the financial crisis”, this time in Latin America, Africa and other poor countries. All due to debt.

In 2017 the global economy needs a comprehensive, consistent, and coordinated policy approach to reinvigorate growth, ensure it is distributed more equally, and make it sustainable.

Advanced economy forecasts for 2017 from the IMF

USA

The IMF marked down its forecast for the United States in 2016 to 1.6 percent, due to weak business investment and diminishing pace of stockpiles of goods. U.S. growth is predicted to rise to 2.2 percent in 2017 as energy prices rise and the dollar weakens.

UK

Uncertainty following the “Brexit’’ referendum in June will impact on the confidence of investors into 2017. U.K. growth is predicted to slow to 1.1 percent in 2017, down from 1.8 percent in 2016.

European Union

The euro area will expand 1.5 percent in 2017, down from 1.7 percent growth in 2016.

Japan

The world’s number 3 economy, is expected to remain subdued at 0.6 percent in 2017. In the near term, government spending and easy monetary policy will support growth; in the medium term, Japan’s economy will be hampered by a shrinking population.

Emerging market growth expected to accelerate

In emerging market and developing economies, growth in 2016 has accelerated for the first time in six years, to 4.2 percent. In 2017 growth is expected of 4.6 percent, though prospects differ sharply across countries and regions.

China

The world’s second largest economy, needs to continue to move away from reliance on investment and industry toward consumption and services, a policy that is expected to slow growth in the short term while building the foundations for a more sustainable long-term expansion. China’s economy is forecast to expand 6.2 percent in 2017, down from 6.7 percent in 2016.

Asia

Growth in emerging Asia, and especially India, continues to be resilient. India’s gross domestic product is projected to expand 7.6 percent in 2017 as it continues to reform its tax system and eliminate subsidies to provide more resources for investments in infrastructure, education, and health care.

unctad

 

Africa

Sub-Saharan Africa’s largest economies continue to struggle with lower commodity revenues. Nigeria’s economy is forecast to shrink further in 2017. South Africa’s economy will barely expand. By contrast, several of the region’s non-commodity exporters, including Côte d’Ivoire, Ethiopia, Kenya, and Senegal, are expected to continue to grow at a robust pace of more than 5 percent in 2017.

Latin America

Economic activity slowed in 2016. Several countries are mired in recession, with recovery expected to take hold in 2017. Venezuela’s output plunged 10 percent in 2016 and is likely to shrink another 4.5 percent in 2017. Brazil saw a contraction of 3.3 percent in 2016, but is expected to grow at 0.5 percent in 2017, on the assumption of declining political and policy uncertainty and the waning effects of past economic shocks.

Middle East

Countries in the Middle East are still confronting challenging conditions from subdued oil prices, as well as civil conflict and terrorism.