Outlook for Global Economy, Equity Markets Brighter
Outlook for Global Economy, Equity Markets Brighter

Outlook for Global Economy, Equity Markets Brighter

Outlook for Global Economy, Equity Markets Brighter

Ebrahim Rahbari remains positive on the global economy and equity markets for now. The head of global macro­economics at Citi expects growth to accelerate in the near term as people finally shake off the gloom associated with the last financial crisis.
While the global economy may be near “peak momentum” and asset valuations are “stretched”, growth is strong and broad-based across most developed markets and many emerging markets. Moreover, Citi expects a pick-up in capital investment globally and faster US growth stemming from Donald Trump’s plans for tax cuts, AAP reported.
“The most remarkable part of this upturn, the current improvement in global growth, is that we are finally seeing investment come through,” Rahbari said at the Citi Investment Conference in Sydney Tuesday. “We could have a bit of upside in economic growth rates both globally and in the US.”
He expects the “end of pessimism” to inspire a return of capex spending in the industrial sector. “It’s more driven by the fact that we’ve stopped getting ever more worried about the outlook and we’ve kind of converged to the ‘new normal’ in a way that actually underpins a little bit of additional investment spending,” Rahbari said.
“My guess is, near term, we have a little bit of upside risk in economic growth but we are probably not far from the peak of the momentum.”
Citi predicts global growth of 3% to 3.5% next year—which is “unremarkable” compared with just before the crisis but “respectable” compared with long-term averages.
“What strikes us as most unusual in this current pattern is how broad-based the recovery is and how few risks we are seeing that some significant part of the world is facing a slowdown in the near future,” Rahbari said. “It’s a very broad-based and perhaps there are some upside risks.”
In recent years the eurozone was viewed as a key risk to the global outlook. “We were often worried that things could fall apart (in the EU)—that either the economy would struggle to recover or that there would be a significant crisis in financial markets.
“But the eurozone is now among regions that are doing well and it has in fact outgrown the US economy for the last couple of quarters and there’s every expectation that this will continue for some time.”
In his view that’s also true for the other big laggard—Japan.

Short URL : https://goo.gl/eXTzTs
  1. https://goo.gl/BsrHoH
  • https://goo.gl/Pi49Jw
  • https://goo.gl/97cAcQ
  • https://goo.gl/RPC9JJ
  • https://goo.gl/5izS9L

You can also read ...

ECB President Mario Draghi (L) and US fed chair Jerome Powell at the ECB Forum on Central Banking in Sintra, Portugal, June 20.
The world’s most-powerful central bankers warned that...
Consumer prices rose just 0.1% in May, down from a 0.3% gain in April.
Canada’s economy showed unexpected weakness in the second...
Brazil CB Holds Rate Steady
For the second consecutive time, the Central Bank of Brazil...
China Trade Surplus Shrinks
China’s trade surplus shrank markedly in the first five months...
Inflation rate forecast for the full year is averaged around 3.1%.
Saudi Arabia is so intent on changing its identity that today’...
Productivity in Japan’s manufacturing sector is high  but service sector has declined in recent years.
Japan is famous as a land of robots, but most of those...
Ukraine Shadow Economy Drops to 31% of GDP
Shadow economy in Ukraine dropped by 4% in 2017, to 31% of GDP...
Turkey Sees 22% Yearly Decline in FDI
Turkey attracted some $3.1 billion in net international direct...

Add new comment

Read our comment policy before posting your viewpoints