2017: Global growth likely to be back to the last years’ average, but still no acceleration - Commerzbank

Analysts at Commerzbank notes that both the upward trending global leading indicator (LI) and the global PMI suggest some upside for the global growth in 2017 but the acceleration of growth is likely to be anything but strong.

Key Quotes

“We expect it to be only slightly higher in 2017.”

“First, the growth gap between emerging and industrialised economies is likely to rise again in 2017. This is not driven by stronger demand for EM goods but by a rebound of growth in Brazil, South Africa, Russia and CIS. Second, growth is also expected to be slightly higher in some industrialised economies. For instance, US GDP is expected to grow by 2% in 2017, which is 0.5pp higher than the growth forecast for 2016. Canada is expected to return to more than 2% real GDP growth in 2017 after an expected 1.2% in 2016.”

“However, while higher growth rates are seen for North America in 2017, the picture is far more lacklustre in Europe. The euro area is expected to grow at a rate of 1.5% in 2017, which is slightly lower than in 2016. And for the UK, it is likely to be hard to maintain the 2% growth expected for 2016 in 2017. Our economists predict a moderate rise in global GDP from 2.8% in 2016 to 3.2% in 2017.”

“The interesting part of 2017 is beyond the numbers: how will Trump shape the US and the world, and will we see another episode of EU disintegration?”