Investors sound optimistic about a breakout for the world economy next year, but for all the talk of huge tax cuts from the incoming U.S. presidency of Donald Trump, the economic outlook looks similar to 2016: uneven and unspectacular.
Accelerating inflation and a soaring U.S. dollar as the Federal Reserve raises interest rates are also risks to the economic balance, magnified by that pending stimulus.
Much may hinge on financial markets, which for a brief period around the start of this year looked like their fretting over China might throw the global economy off track. There is plenty more uncertainty about trade with China now than then.
So, many of the several hundred professionals polled by Reuters worldwide say the global trade slowdown during the world economy’s lukewarm recovery from financial crisis that started nearly a decade ago could worsen.
Emerging economies will remain vulnerable. Brazil’s persistent, crippling recession is way out of line with its soaring stock market, and much of Asia will grow below potential, putting the latest global growth forecast for the year ahead at 3.2 percent, less optimistic than it was this time last year.