Outlook and convictions for 2017
Despite generally positive expectations of growth in 2017, we should bear in mind certain factors that indicate uncertainty: President Trump's protectionist tendencies and the potential difficulties to realize his proposed program, the European elections, and the consequences of Brexit.
Nevertheless, global growth seems to continue at a faster pace, which is still moderate at this stage, but sustained by several positive signals :
- Improved macroeconomics indicators;
- The strong recovery in inflation expectations.
- Increased interest rates;
Accordingly, the United States is experiencing rapid expansion – consistently driven by domestic consumption – whereas China is controlling the expected slowdown in its growth while also rebalancing export and consumption trends within its economy.
Although the eurozone is still threatened by the possibility of a negative outcome in the upcoming elections, it shows signs of improvement. The consistent decline in unemployment rates will bolster household income, thereby establishing a solid basis for growth through consumption. Lastly, the United Kingdom has shown astonishing resilience faced with the prospect of Brexit.
Last month, the US Federal Reserve, to some extent, reinforced these positive expectations with a planned acceleration, in 2017, in the normalization of US monetary policy.
The ECB, on the other hand, has announced a major turning point in its monetary policy. The reduction – albeit conservative – of its asset purchases is a first step towards the reorientation of its Quantitative Easing programme, which should show a gradual decline over the next two years.