“The global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018. Broad-based upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia more than offset downward revisions for the United States and the United Kingdom. But the recovery is not complete: while the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies.” (IMF, World Economic Outlook, October 2017)
The acceleration in the global economic growth rate which began in the second half of 2016 has continued into 2017. Consumer and business confidence has grown steadily, global trade is exhibiting stronger momentum, and fiscal retrenchment is over in most advanced countries. At this juncture the global upswing has spread to all the advanced economies.
In other words, the advanced economies in 2017 and 2018 could well post their strongest growth performances in this decade.
While the economic recovery among the G7 economies has been rather similar in many ways, many of the emerging market economies are still struggling. Nonetheless, economic activity in China remains unusually robust, and growth is returning in Russia and Brazil, which faced deep recessions over the last three years.
India’s government recently received a boost from Moody’s, which raised its sovereign bond rating for the first time in 14 years. However, India’s economy has been decelerating for nearly a year because of poorly implemented tax reform and demonetization measures. India’s economy is once again growing slower than China’s.
Canada’s relatively strong economic growth performance this year (3.1% estimated growth) is taking place in tandem with the other advanced economies. Indeed, all G7 economies are expanding faster than their estimated trend growth rates.
The current American expansion is the third-longest since World War II and the 3% annual GDP growth rate reported for Q3 is well above the country’s estimated potential growth rate. However, in view of the political shenanigans in Washington, most forecasting organizations have scaled back the size of the expected economic boost from the Trump tax cuts and infrastructure spending programs.
