2017 Outlook: What’s next for the global economy?
Video transcript of "What’s next for the global economy?":
What is the economic outlook for 2017 and beyond?
Where does growth accelerate? Mainly in the US, where it's going up beyond 2%. It's also accelerating in Japan thanks to a very active policy support.
Where is it stabilizing? In Europe, as usual, where we have a mix, a combination, of monetary and fiscal policy and some electoral risk. Where we are seeing risk is mostly in emerging markets, partly because of the dollar appreciation.
Are higher interest rates back for good?
Since last summer, all central banks have started withdrawing from the ever-more accommodative monetary policy. This is true for the Fed. It's true for the ECB. It's also true with respect to the Bank of Japan. It is this progressive withdrawal, which will insure that the rate increase is actually sustainable.
Could the upcoming European elections be the next black swan?
The Brexit is different from Trump's election because in the U.K. the elite, or part of the elite, voted to exit the EU. In Trump, in the US, for Trump, there was no elite vote. In Italy, it was a rejection of the current leader and its reform program.
The main risk could be France, but I believe this has changed as well. In the run-up to the French election, we will now have a whole set of new candidates, and the fact that we are not replaying 2012, that they are new faces, the fact that in France, the far right has been there for a long time and is not a new joiner, as Trump was, sets a completely different stage.
I think the French election will be a lot more standard than what people have in mind. As we know in Germany as well, even if Merkel is not re-elected, all together, there are few electoral risks in 2017 across Europe.
Is technology actually “everywhere but in the data”?
The ICT has diffused through and increased GDP growth substantially, at the time. It had boosted the US growth by close to one percentage point, and European growth by close to half a percentage point. At the current level, that would be a significant boost if we had the same phenomenon today.
We are in the early stage of the digital revolution. We have barely seen any effect, other than on the micro level. I believe, looking forward over a five to ten year horizon, we could see the same revolution as we had for ICT.
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