Predictions for 2017: Globalisation takes a backseat

Global Economy Watch, January 2017 

As we enter 2017, many businesses will begin planning for the year ahead, wondering what’s in store for the global economy this year. We believe that there will be three main overarching themes: 

• Firstly, globalisation will continue to take a backseat. 
• The resurgence of economic nationalism in some parts of the world will put World Trade Organisation rules to the test, as well as fuelling geopolitical uncertainty regarding upcoming elections in Europe this year. To this end, our second theme considers that politics will drive uncertainty and economics this year. 
• And thirdly, we think that US monetary policy will move back towards normality, with a gradual monetary tightening over the year.

With these themes in mind, we present our key predictions for the year ahead:

• The US will drive growth in the G7
• Core Eurozone employment will hit an all-time high, but the periphery will create more jobs
• Indonesia is set to become the world’s 16th trillion dollar economy
• Population growth will put pressure on the Gulf (GCC) countries to reform public finances