Global growth is at its strongest since the financial crisis that began exactly ten years ago.
World GDP growth could approach 4% this year, slightly up on 2017 and far ahead of 2016’s 3.2%. The recovery gives countries an opportunity to implement reforms to improve infrastructure and welfare policies in response to fears about sluggish productivity and wage growth and the impact of automation. However, few countries are finding the budgets and political will to do so. Geopolitical-risk concerns have helped commodity prices recover, and investors are ceasing to be so sanguine about them. The fear that US policy will prompt a trade downturn will linger throughout President Donald Trump’s term. Other risks include tighter monetary policy and a financial market downturn.
- What is the direction of the dollar given the competing forces of rising interest rate differentials and high policy risks?
- Is the global economy approaching the peak of its current cycle?
- Will policy be able to address the unpredictability of disruptive technology on jobs and wages?
- Will rising unemployment cause the anti-globalisation backlash to have an impact on some emerging economies?
Analyst, International EconomyOxford Analytica
Fellow and Lecturer in EconomicsUniversity of Oxford
Advisor on Global Economics and FinanceOxford Analytica
Fellow in Economics at St Edmund HallUniversity of Oxford