TORONTO, Oct. 5, 2017 /CNW/ - Global growth is
strengthening as policy stimulus in some advanced economies is
unwound. This is a confirmation of the narrative building
throughout the year, in which the sources of growth have been
broadening across and within countries.
"For the first time since the Global Financial Crisis (GFC), all
45 industrialised OECD countries are set to expand," said
Jean-François Perrault, Senior Vice President and Chief Economist
at Scotiabank. "Given the breadth of growth geographically and its
increasing diversity within countries, the foundation remains for
solid global performance through at least 2018, though geopolitical
risks continue to dominate."
There are now tangible signs that firms have joined households
in contributing to the recovery in most countries, and capital
spending in the more advanced OECD countries is expanding at a pace
not seen in over three years. This is a welcome development given
the general weakness of business investment in companies globally
since the GFC. This turnaround in investment appears to reflect a
number of powerful factors, such as a rise in confidence as ISM
indicators are at multi-year records, the still low cost of
capital, and the general increase in trading partner activity.
Highlights of Scotiabank's Global Outlook include:
- Canada: Growth is
expected to hit 3.1% during 2017 before slowing to 2.0% in 2018 and
1.5% in 2019 as tailwinds from busy Canadian consumers begin to
wane.
- United States: The U.S.
economy is forecast to hit 2.2% y/y in 2017, before plateauing in
2018 at 2.3% and decelerating to 1.7% y/y in 2019.
- Mexico: It is too early
to determine the likely effects of terrible September earthquakes
on the Mexican macroeconomic landscape, but they are expected to be
relatively small.
- United Kingdom: The
Bank of England will likely
deliver a rate hike in November. Moderate tightening is expected to
be delivered during 2018, helped by accelerating growth and wage
inflation in the new year.
- Latin America: As
political situations improve in some countries within the LatAm
region, such as Brazil,
Colombia, and Chile, the economic performances suggest a
gradual recovery.
- China: China is set to remain among global engines of
growth, yet real GDP gains will likely decelerate to 6% y/y by the
end of 2019.
Read Scotiabank's Global Outlook online at:
http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/globaloutlook.pdf
Scotiabank provides clients with in-depth research into the
factors shaping the outlook for Canada and the global economy, including
macroeconomic developments, currency and capital market trends,
commodity and industry performance, as well as monetary, fiscal and
public policy issues.
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SOURCE Scotiabank