Mixed Outlook for Leading Economies

The US and Japan are expected to continue their economic recovery in 2017, while China and the eurozone will likely post slower growth than this year, South Korea’s central bank said Sunday.

The “Big Four” economies accounted for 61.1% of the world’s gross domestic product last year, according to the International Monetary Fund. And 40.7% of global trade came from the four, Yonhap reported.

“The key to the recovery of the global economy is growth momentum of the Big Four economies,” the Bank of Korea said in a report on world economy. The four are projected to stay largely on a modest economic growth path in the coming year, it added.

Especially, US growth is expected to expand in the lower part of the 2% range on increased consumption based on more jobs and wage hikes from around 1.5% this year, the BoK said.

The Japanese economy will also improve next year, boosted by more consumption, facility and public infrastructure investment, it said.

But China’s growth is likely to slow to 6.5% from an estimated 6.7% this year due to pressure from structural reform on the supply side, said the BoK.

The eurozone is also forecast to record around 1.5% growth, lower than 1.7% expected this year, it said, adding there are a host of downside risks from the new US administration’s policy direction and political uncertainties in some European countries.

The Canadian economy will also get its first taste of the Trump era in 2017. It enters 2017 with lingering challenges and a potential new obstacle that could attract more attention than the rest: the economic unknowns of a Donald Trump presidency.