Global economy recovering: Top international economist

The business cycle is warming up. Whether it was banking, trucks and autos, chemicals, mining, energy or construction, optimism was clear

GN Bureau | January 24, 2017


#world economic forum   #global economy   #Global Financial System Initiative  


For the first time in more than a decade we have a reasonably broad based recovery in the global economy, said Anders Borg, chair, World Economic Forum’s Global Financial System Initiative.
 
In an article “Davos download: global economic warming”, which is part of the World Economic Forum Annual Meeting 2017, Borg said that the business cycle is warming up. Whether it was banking, trucks and autos, chemicals, mining, energy or construction, optimism was clear.
 
Macro-forecasts seem to be in line with business sentiment and the projections of growth in the US are being revisited upwards. The IMF is raising the forecast for 2017 for the USA (2.3%), Germany (1.5%), UK (1.5%), Japan (0.8%) and China (6.5%). Other forecasters are actually even more optimistic about growth in the USA and expect GDP-growth to get closer to 3% for the first time in a decade. The fall of the pound sterling helps the UK and the banking crises in Europe are starting to abate.
 
China and India are continuing to print high numbers and Russia and Brazil are getting closer to dry land. For the first time in more than a decade we have a reasonably broad based recovery in the global economy, said Borg.
 
 
The article went on to say that for the rest of Asia, the Donald Trump administration is reinforcing the ongoing re-balancing towards China. Many Asian countries already have an export share with China of 20-30%. When the USA is retreating and is being perceived as an unreliable partner the only alternative is to strengthen the relationship to Beijing. This would inevitably have happened over the next coming decades, but Trump has fast-forwarded the development.
 
The banking sector has been a major drag on growth in Europe. The recovery of the stock prices the last couple of months comes on the back of raising interest rates, somewhat stronger demand and somewhat lower uncertainty concerning how Italy will deal with the non-performing loans. The new administration in the US will also mean that the Basel-process will going much slower and it is unlikely that the US will sign up to any international agreement on further tightening of capital requirements. In the short term this will push bank stocks further upwards also in Europe. In the long run another banking crisis has become much more likely. This time will not be different.
 
Read: The complete article here 

Comments

 

Other News

Lost in Transmission: Why calls ‘drop’, what can be done about it

Random call drops across cellular networks has been a major nuisance for consumers. Despite the advent of technologies like 4G, 5G and users upgrading their phones, they continue face the same old problem of call drops. Earlier, with 2G, calling was the primary service from the mobile telephony firms, howe

India’s Semiconductor Mission takes giant leap

The union cabinet on Thursday approved the establishment of three semiconductor units under ‘Development of Semiconductors and Display Manufacturing Ecosystems in India’. Involving a total investment of nearly Rs 1.26 lakh crore, the three units  -- two in Gujarat, one in Assam – wil

Mumbai Airport: Less congestion, fewer delays, says MoCA

Mumbai is one of busiest airports in India, handling a large volume of domestic and international flights including military, non-scheduled and general aviation flights. Mumbai`s Chhatrapati Shivaji Maharaj International Airport (CSMIA) has two intersecting runways which cannot be operated

“900 tenders worth Rs 150 crore?” For ward-level works: BMC

BrihanMumbai municipal corporation is floating nearly 900 tenders worth of Rs 150 crore in the next 10 days, but that is only for ward-level civic works, the BMC clarified on Monday, reacting to reports in a section of media.    “Since there are 25 wards in BMC, it involves m

Elections 2024: Banks, post offices to chip in for voter education

In a first-of-its-kind initiative, Election Commission of India (ECI) on Monday signed a memorandum of understanding (MoU) with two prominent organisations, the Indian Banks’ Association (IBA) and the Department of Posts (DoP), to amplify its voter outreach and awareness efforts ahead of the forthcom

Charming tales of the Snakeman’s early years

Snakes, Drugs and Rock ’N’ Roll: My Early Years By Romulus Whitaker with Janaki Lenin HarperCollins, 400 pages, Rs 699

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter